What is the difference between ESG, SRI, and Impact Investing?
Environmental, social, and governance (ESG) investing means incorporating ESG information into your investment methodology to potentially improve your risk-adjusted returns.
Socially Responsible Investing takes ESG Investing and then adds the step of removing investments due to ethical guidelines. Usually, investments are removed due to religion, personal values or political beliefs.
Impact Investing focuses on positive outcomes, meaning investments are screened to have a positive impact on society or the environment. The purpose of Impact Investing is to help your investment accomplish its goals; such as, reducing carbon emissions and improving overall living standards.
For clients who want to align their investments with their values, we’ll screen, integrate and communicate the impacts of your portfolio. Ask us about aligning your values with your investments.
ESG securities could underperform broad market indices. Investors must accept these limitations, including potential for underperformance. Correspondingly, the number of ESG mutual funds and exchange traded funds are few when compared to those that do not maintain such a mandate. As with any type of investment (including any investment and/or investment strategies recommended and/or undertaken by CRA, there can be no assurance that investment in ESG securities or funds will be profitable, or prove successful.