What is sustainable investing?

Sustainable investing, also known as ESG investing, is an approach to investing that incorporates environmental, social and governance (ESG) factors in the research process to complement traditional financial analysis.

Understanding ESG factors

ESG factors are important drivers of change and can affect the environment in which companies operate, creating both risks and opportunities.

Sustainable investments

Looking for sustainable investments to add to your portfolio? Fidelity has a lineup of mutual funds and an ETF for Canadian investors seeking ESG-related products to diversify their investments accounts.

The benefits of sustainable investing

Align investing with values.

Sustainable investment strategies consider environmental, social and governance characteristics of companies in a way that can allow investors to align their values and beliefs with their investment objectives. objectives.

Improve risk management.

Evaluating ESG issues provides a more holistic view of risks that companies face and can help reduce exposure to risks that may not be visible on a company’s financial statements.

Uncovering opportunities.

Integrating ESG can also help uncover opportunities that would be difficult to identify through traditional financial analysis alone and thus has the potential to enhance long-term returns.

How can I invest sustainably?

There are different ways to invest sustainably. Evaluating ESG factors in addition to financial factors when analyzing companies is one example. Excluding companies based on ESG performance and attributes is another. Regardless of the approach, evidence has shown that incorporating ESG factors in the investment process of sustainable investment funds can help mitigate risk and uncover new opportunities.

Approaches to sustainable investing

Exclusionary or negative screening

The fund applies rules based on undesirable ESG-related criteria to determine whether an investment is not permitted, including the exclusion of certain types of investments, sectors, or companies from a fund’s portfolio based on certain ESG-related criteria.

Best-in-class or positive screening

The fund applies rules based on desirable ESG-related criteria that determine whether an investment is permitted. 

ESG integration

The fund considers ESG-related factors within an investment analysis or decision-making process with the aim of improving risk-adjusted returns. 

Thematic investing

The fund selects assets to access specified ESG-related trends. 

Impact investing

The fund invests with the intention of generating a positive, measurable social and/or environmental impact alongside a financial return. The aim is to contribute to, or catalyze, environmental or social improvements. 

Stewardship or active ownership

The fund uses investor rights and influence (such as proxy voting and shareholder engagement) to protect and enhance overall long-term value for clients and beneficiaries. This includes influencing the activities or behaviour of underlying portfolio companies on ESG-related matters. Active ownership can be used as an additional investment overlay to complement one of the many ESG approaches.

Why invest with Fidelity?

Fidelity Investments Canada ULC is committed to offering sustainable investment funds to help our clients achieve their financial goals. We believe that strong research can help drive the long-term performance that our clients demand. Supported by a strong global research platform, we believe we have a competitive edge and the intelligent insights needed to create strong investment opportunities for Canadian investors.