This year’s Earth Day focuses on tackling the existential threat of climate change in a tangible way: by moving from a fossil fuel economy to a green, carbon neutral economy., the global organizer of Earth Day, calls on individuals, governments, businesses and institutions to “recognize our collective responsibility and help accelerate the transition to a just, prosperous green economy for all.” So, how does that translate to your investments? Let’s break it down.

What is sustainable investing?

Sustainable investing considers a company’s environmental, social and governance (ESG) practices and how they can affect long-term performance and investment returns.

Many Canadian investors include ESG issues in their investment analysis and decision-making. Responding to an Ipsos poll conducted in August 2021 for SunLife Financial, two-thirds of Canadians said ESG factors play a “somewhat important” or “very important” role in deciding which investments to buy. A survey by the Responsible Investment Association in September 2021 found that 73% of Canadian investors were interested in responsible investing, and 77% said they wanted their financial services company to educate them about responsible investments consistent with their values.

In addition to sustainable investing, investors also use these terms: responsible investing (RI), socially responsible investing (SRI), ethical investing, green investing and impact investing.

Which ESG factors are investors taking into account?

Below are many of the non-financial issues investors and other company stakeholders look to to assess ESG performance:

Environment: CO2 emissions, air and water pollution, energy efficiency, water use, waste management, deforestation, commitment to biodiversity, sustainability of supply chains
Social: gender and diversity, labor standards, human rights, customer service, community relations, data protection and privacy, employee engagement, health and safety at work
Governance: governance practices; board diversity; regulatory compliance; remuneration of directors; succession planning; diversity, equity and inclusion; bribery and corruption; lobby; political contributions

More information about responsible investing

If you’re curious about how to align your investments with your values, don’t miss this helpful information:

Why sustainable investing is important
An investment advisor explains the key details about sustainable investing, the different approaches (impact investing, targeted investing, divestments, etc.) and how to get started. Halal investing in Canada
Canadian Muslims have unique investment needs. Jason Heath shares options that are compatible with Sharia, including Halal mutual funds. Invest your conscience
Socially responsible investing has come a long way in Canada. This 2017 article looks at Canada’s attitude to SRI and how to explore potential investments.

More ways to celebrate Earth Day

On April 22, join other concerned citizens to support the planet, whether you’re participating in a local cleanup, taking environmental action at home, or attending a virtual Earth Day event.

The first Earth Day was celebrated in the United States in 1970 and marked the beginning of the modern environmental movement. In 1990, Earth Day went global, mobilizing millions of people to take action for the planet; that year also marked the founding of Earth Day Canada.

This post Earth Day 2022: It’s time to invest in our planet

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