Profitability, AI adoption, and consistent equity stories outweigh ESG in driving confidence
Canadian investors are doubling down on investment fundamentals and long-term strategic thinking amid macroeconomic uncertainty and technological disruption.
McKinsey’s latest survey reveals key shifts in investor sentiment, highlighted by survey authors including John Evers, a knowledge expert in the Toronto office.
While the earlier 2023 findings highlighted cost efficiency, capital productivity, and product innovation as crucial long-term value drivers, the latest data shows a renewed emphasis on headline profitability metrics, most notably return on capital. Investors still value the underlying levers of growth but increasingly expect these to translate into tangible financial results.
The six factors that investors use to determine a company’s attractiveness are:
- financial performance and health
- market position and competitive advantage
- management and leadership
- growth prospects and opportunities
- strategic focus and business model
- industry dynamics and trends
Canadian participants in the international study, representing roughly 81 institutional investors managing portfolios larger than US$1 billion and operating with at least a four-year horizon, voiced heightened concern for overall financial health and performance, not just competitive positioning or margins. This broader financial outlook likely stems from ongoing economic volatility and shifting interest-rate expectations.
Around a third of respondents now identify “AI and technology utilization” as features of a high-performing company in 2025, a category that went unmentioned in the 2023 survey, highlighting investors’ growing recognition of AI’s strategic importance.
ESG criteria appear slightly less pivotal, dropping from 20% in 2023 to 18% of respondents who now consider this an extremely or very important driver of long-term value creation.
Canadian investors echoed global respondents in emphasizing the importance of a consistent “equity story,” relying heavily on metrics like EBITDA, ROIC, and EBITDA margins. Over 90% stressed that this equity story must be aligned across investor communications, from capital-markets presentations to investor days, and that inconsistency in messaging can erode confidence.
“The survey results are a reminder of how important it is for companies to anchor their narrative in the right metrics, articulate a clear strategy, and foster open dialogue. By combining these actions, companies can effectively engage investors, build trust, and position themselves as compelling investment opportunities,” the survey’s authors state.
