Scotia iTrade has announced Canada’s first sustainable investing tools geared toward direct investors. With the new tools, direct investors can supplement their research with environmental, social, and governance (ESG) data — information that was previously limited mainly to institutional investors and portfolio managers.
The online brokerage service’s sustainable investing tools rely on ESG research and ratings provided by Sustainalytics, a global independent provider that caters to asset owners and investment managers. With the information, retail investors can better grasp ESG issues affecting companies, letting them determine leaders and laggards in corporate responsibility, as well as invest based on their personal convictions.
“Increasingly, retail investors are seeking more information on how corporations are managing ESG issues,” said Sustainalytics CEO Michael Jantzi. Under the partnership with iTrade, his firm provides performance ratings based on ESG factors for over 1,200 companies on the TSX and the Russell 1000 Index. The factors considered include labour relations, clean energy usage, green initiatives, and ethical business practices.
ESG factors have been gaining recognition as variables that could affect long-term corporate risk and return on investments. Improved regulatory compliance, reduced exposure to lawsuits, and increased operational efficiency are some of the ways ESG factors have been linked to company performance.
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