Learn about responsible investing
Common approaches, key terms and questions to consider. Educational information only — not investment advice.
Common approaches
Exclusionary screening
Avoiding companies or industries that conflict with an investor's values — for example, certain products, practices or sectors.
Positive (best-in-class) screening
Favouring companies that perform comparatively well on chosen environmental, social or governance (ESG) measures within their industry.
ESG integration
Considering environmental, social and governance factors alongside traditional financial analysis when evaluating investments.
Thematic investing
Focusing on themes such as clean energy, water, education or health, where investors believe long-term trends align with their goals.
Impact investing
Investing with the intention of generating measurable social or environmental outcomes alongside a financial return.
Shareholder engagement
Using ownership rights — voting proxies, dialogue with management, filing resolutions — to encourage change from within.
Community investing
Directing capital to communities that are underserved by traditional finance, often through community development institutions.
Key terms
- SRI
- Socially responsible investing — considering ethical, social and environmental factors in investment choices.
- ESG
- Environmental, social and governance — a framework of non-financial factors used to evaluate companies.
- Impact investing
- Investing with an intention to create measurable positive social or environmental outcomes.
- Proxy voting
- Voting on company matters as a shareholder, often through a fund manager on investors' behalf.
- Greenwashing
- Overstating or misrepresenting how sustainable or responsible a product or company really is.
- Prospectus
- The official document describing a fund's objectives, strategy, risks and costs — worth reading.
Questions to ask before you invest
- ◆Which values or issues matter most to me, and which trade-offs am I comfortable with?
- ◆How does a fund define terms like “sustainable”, “ESG” or “impact”, and what does it actually hold?
- ◆What screening or selection method does it use, and how is that disclosed?
- ◆What are the fees, risks and diversification compared with alternatives?
- ◆Does it report on its engagement activity or the outcomes it claims?
- ◆How does it fit my overall time horizon, goals and risk tolerance?
Not investment advice. The information on this page is general and educational. It does not take into account your objectives, financial situation or needs. Investing involves risk, including loss of principal.