Canadians more interested in sustainable investing, Mackenzie survey reveals

But only a minority have discussed this with their financial advisor

Canadians more interested in sustainable investing, Mackenzie survey reveals
Steve Randall

While investors south of the border appear to be growing less open to ESG and sustainable investing, Canadians are seeing more opportunity in these strategies, despite concerns.

A new report from Mackenzie Investments, published today (April 18) ahead of Earth Day next week, reveals that one quarter of those who took part in the Pollara Strategic Insights survey already hold sustainable investments, while 45% plan to do so within the next two years.

But the survey also found that just 33% of respondents who work with a financial advisor have discussed sustainable investing with them.

The continued issues around reliability of information and data is also a major concern, with 61% having concerns about greenwashing and transparency in corporate governance within the SI space and 43% saying that clear global standards and guidelines are lacking. This was also highlighted in a recent survey of institutional investment professionals in the U.S.

For more than four in ten there is also a belief that returns are lower for sustainable investments than for traditional options.

"It's encouraging to see growing interest in and adoption of sustainable investing, reflecting a shift towards aligning financial goals with environmental and social considerations,” said Fate Saghir, SVP, Sustainability, Mackenzie Investments.  “However, what’s also clear is that our industry still has work to do to address concerns and misconceptions around greenwashing, transparency and performance. Further, given the growing popularity of sustainable investments, there’s a significant opportunity for advisors to strengthen and expand relationships with clients by helping educate them on the role sustainable investments can play in portfolio construction.”

Green energy transition

Canadian investors see great opportunity in investing in the green energy transition and are generally familiar with its focus on shifting to low-carbon and renewable options to mitigate global warming and biodiversity loss.

They are also agreed that investing in this shift is a positive step for improving the outlook for the world for future generations, the environment, and health. But there is a lack of knowledge about the scale of the energy transition already underway and the investing opportunities it creates – just 38% said they adequately understand.

“Opportunities within the energy transition will continue to grow as the world shifts toward a low-carbon future,” added Saghir. “The financial industry, including investment managers and advisors, have an important role in making knowledge and education accessible. We need to get to a place where Canadians can be confident that their investment dollars will provide both returns, and a real, positive impact on our local and global world.”