What is Sustainable Investing?

3 min read
Brought to you by Sound Choices - AGF Education for Investors and Advisors

Sustainable investing or responsible investing refers to investment strategies that aim to create long-term value for investors while also contributing to a better environment, healthier communities and good corporate governance practices.

Investment Approaches  

In response to increasing interest, a wide spectrum of sustainable investing approaches and products have developed, ranging from mainstream investment management teams considering environmental, social and governance (ESG) issues as part of their investment processes to highly specialized 100% impact groups.

 

Exclusionary Screening

Definition
Excludes companies, sectors, or countries based on ethical, moral or religious beliefs.


Purpose / Objective
Eliminates exposure to a group of securities while pursuing a traditional investment objective (e.g., growth, income, etc.).
ESG Factor Integration

Definition
Combines environmental, social and governance (ESG) data, research and analysis together with traditional financial analytics in the decision-making process. May not explicitly exclude investing in undesirable countries, companies, etc.


Purpose / Objective
Incorporates ESG risks into analysis of all holdings, with two primary objectives, to reduce risk or improve performance alongside pursuing a traditional investment objective (e.g., growth, income, etc.).
Shareholder Engagement

Definition
Uses the power of shareholders and stakeholders to influence corporate behaviour.


Purpose / Objective
Influence corporate behaviour in order to move forward an issue related to Environment, Social or Governance initiatives.
Thematic Investing

Definition
Invests in sustainable businesses that are related to and likely to benefit from specific themes (e.g., energy efficiency, green infrastructure, clean fuels, low-carbon transportation infrastructure, etc.)

Purpose / Objective
Provides investors exposure to a specific theme, linked to one or more issue areas where a social or environmental need has the opportunity to create growth opportunities.

Impact Investing

Definition
Investments made into companies, organizations, and funds with an intent to generate a measurable, beneficial social & environmental impact alongside a financial return. 

Purpose / Objective
Focus on generating a measurable impact in one or more issue areas.

 

To find out more about AGF's sustainable investing options, contact your financial advisor. 

 

Commissions, trailing commissions, management fees and expenses all may be associated with investment fund investments. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

This material is for informational and educational purposes only. It is not a recommendation of any specific investment product, strategy, or decision, and is not intended to suggest taking or refraining from any course of action. It is not intended to address the needs, circumstances, and objectives of any specific investor. This information is not meant as tax or legal advice. Investors should consult a financial advisor and/or tax professional before making investment, financial and/or tax-related decisions.

® ™ The “AGF” logo and all associated trademarks are registered trademarks or trademarks of AGF Management Limited and used under licence.

RO 3105306 
September 20, 2023

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