Sustainable investing—also referred to as ESG investing—is often associated with climate risk. However, many investors stress other environmental factors such as biodiversity, water pollution and waste management. And sustainable investing may also encompass social and governance factors.
In this article, Sarah Thompson, Managing Director of Sustainable Finance at RBC Capital Markets, discusses how family offices are integrating traditional asset management focused on financial return alongside investments that highlight specific environmental or social impacts, enabling the development of a unique investment approach for the family:
- Sustainable investing is a set of tools for investors to use in deploying their capital
- Companies demonstrating strong ESG typically offer good investment opportunities
- Transparency and meaningful disclosure standards are key to effective sustainable investment strategies
- “Transition finance” is particularly important in Canada with an economy dominated by the energy sector
- High net worth families are well suited to ESG investing as they are generally able to take the long view
“Sustainable investing is not a rigid set of rules about how money should be invested.”
—Sarah Thompson, RBC Capital Markets