ESG investing statistics

Impact investing is on the rise in Canada, but are consumers willing to put their money where their mouths are? To find out, Finder asked more than 1,000 Canadians about their investment goals and priorities in January 2023.

Quick summary

• 82% of Canadians say that when making an investment, they care about a company’s environment, social and governance (ESG) factors
• 70% are willing to make less of an annual return on their investments if it means investing in a company that produces tangible social good
• On average, those who are prepared to earn less are happy to see their annual returns decline by 2.75% per annum (p.a.)
• Canadians between the ages of 18 to 24 are most willing to earn less to invest in an ESG-friendly way (82%), while those 54 and older are the least willing (58%).

ESG or impact investing in Canada

• 82% of Canadians say that a company’s ESG factors are important considerations when making investments.
• 70% of Canadians are willing to make less of a return on their investments if it would mean they’re investing in companies that produce a tangible social benefit. That’s equivalent to nearly 21.8 million adults.
• Those who are prepared to earn less are happy to see their annual returns decline by 2.75% p.a. on average.
• This could mean socially responsible investors are willing to sacrifice over $200,000 over a 20-year timeframe, assuming an initial $10,000 investment and an additional $1,000 invested a month at a reduced annual return rate of 7.25% (down from 10%).
• However, 13% are willing to see only a 1% decline. An additional 8% say they’re only willing to earn 0.5% less.
• Nearly one in five (19%) are willing to see a reduction of 5% or more in their annual returns. Using the same assumptions as the prior example, this would see those Canadians earning more than $350,000 less over 20 years.

• Amount earned by % interest
• How much do Canadians care about ESG?
• Less annual returns

Impact investing by gender

• Women (85%) are more likely than men (79%) to care about a company’s ESG factors when making an investment decision.
• However, men are more likely than women to accept less of a return on their investment to produce a tangible social good (71% vs 69%).
• On average, men are willing to earn 2.84% less on their annual investments for social good, compared to 2.68% for women.
• More men (21%) are also willing to earn at least 5% less for the sake of ESG investing compared to women (17%).

Impact investing by age

• Canadians aged 18–24 (87%) are the most likely to take a company’s ESG factors into consideration when making an investment. They are also likely to be willing to earn less (82%).
• The older Canadians get, the less willing they are to earn a smaller return on their investments. Only 58% of those aged 54 and above said they were willing to earn less per year for ESG investing.
• People aged 18–24 are prepared to earn an average of 2.48% less p.a. Meanwhile, those aged 25–34 are willing to earn 2.75% less, those aged 35–44 2.76% less, those aged 45–54 2.89% less and those aged 55 and above 2.8% less.

ESG or impact investing funds in Canada

• Canadian sustainable funds held US$22.2 billion of sustainable assets as of September 2021.
• That’s the lowest amount compared to other regions such as Europe (US$3.4 trillion), the US (US$330 billion) and Asia (US$81.6 billion).
• The value of responsible investment portfolios totaled $3 trillion at the end of 2021, a drop from $3.2 trillion at the end of 2019.
• A separate survey found that 43% of Canadians have a positive opinion on having an entirely sustainable portfolio. Only 15% are against the idea while the remaining 42% are neutral.

Global ESG investing

• ESG investments now account for more than 25% of the world’s professionally managed assets globally.
• The value of investments that claim to be ESG-friendly has grown from US$23 trillion to US$35 trillion in 2016 and is on track to hit US$50 trillion by 2025.
• The long-term performance of a sample of 745 Europe-based sustainable funds shows that the majority of strategies have done better than non-ESG funds over 1, 3, 5 and 10 years. However, only 3 in 10 euro corporate bond funds achieved better returns than their non-ESG funds over the same period.
• Sustainable funds have greater survivorship rates than non-ESG vehicles. On average, 77% of ESG funds that were available 10 years ago still exist compared to 46% for traditional funds.