Canadians want guidance on responsible investing, study finds

A new survey highlights an ‘RI awareness gap’ and wide interest in gender parity

Canadians want guidance on responsible investing, study finds
A new report shows that most Canadian investors are interested in responsible investments (RI), and they would be more likely to pursue such investments if they got suitable recommendations from their financial advisors.

The report from the Responsible Investment Association (RIA), which surveyed 1,084 Canadians and was sponsored by OceanRock Investments, found 77% of respondents interested in investments that incorporate environmental, social, and governance (ESG) issues. However, 73% know very little or nothing about them, which results in a so-called “RI awareness gap.”

“A strong majority of investors told us that they are more likely to choose responsible investments if their advisor suggests suitable options or if their financial institution, credit union or online brokerage informed them about responsible investments,” said Deb Abbey, CEO of the RIA.

Respondents also said if they were more confident in RI performance, they’d be more likely to pursue responsible investing. “These findings show that investors need more information from their advisors about responsible investments, and that right now they are largely unaware that they perform just as well if not better than traditional investments,” Abbey said.

While those polled seemed unsure about the performance of RI, 77% agreed that companies with good ESG practices are better long-term investments. Eighty-two per cent (82%) of investors would like to dedicate part of their portfolio to RI, and 52% would like to put more than half of their portfolio in RI.

The study found interest in RI among 85% of millennials (18-35 years old), 80% of generation Xers (36-54 years old), and 69% of baby boomers (55 years and above).

Gender issues were also found to be important to investors, with 92% believing that women and men should receive equal pay for equal work. Among the respondents, 76% think that companies should be required to disclose how much they pay women compared to men.

Asked what they would do if they learned a company they’re invested in doesn’t pay men and women equally for the same work, 15% said they would sell their investment, while another 65% would either think about selling, or sell if they found a similar company that offered greater pay equity.

Fred Pinto, CEO of OceanRock Investments, noted that Canada has a dismal record of gender parity in corporate leadership, with securities regulators finding that women hold only 12% of seats on Canada’s corporate boards.

“A diversity of views from independent directors is a check against group-think and improves corporate governance,” said Pinto, who is also head of wealth and asset management with Qtrade Financial Group. “It’s good for the company and, as we see in the latest RIA research, it’s what investors want.”

Referring to recent data from Statistics Canada, the report said full-time female workers in Canada earn 74 cents for every dollar in annual earnings that men make, while hourly-paid women earn just 87 cents on the dollar.

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