Earth Day: How you can invest in our planet

The 2024 Earth Day theme is “Planet vs. Plastics.” It urges everyone to “advocate for widespread awareness on the health risk of plastics, rapidly phase out all single use plastics, urgently push for a strong UN Treaty on Plastic Pollution, and demand an end to fast fashion.” Its goal is a 60% reduction in the production of plastics by 2040.

What is sustainable investing?

In recent years, Earth Day has also focused on sustainable investing, which takes into consideration a company’s practices and policies for environmental, social and corporate governance (ESG) and how they could affect long-term performance and investment returns.

In March 2023, a survey by Pollara Strategic Insights on behalf of Mackenzie Investments found that 81% of Canadians think “it is important to use their investment dollars to influence positive societal change.” In addition, 92% of respondents who hold sustainable investments said they plan to increase their sustainable holdings in the next few years, up from 71% last year. Investors are, however, also casting a critical eye on companies’ sustainability claims, with many respondents concerned about greenwashing, poor access to information and not being able to hold businesses accountable for their social and environmental impact.

Sustainable investing is also referred to as responsible investing (RI), socially responsible investing (SRI), ethical investing, green investing and impact investing.

What ESG factors do investors consider?

Below are many of the non-financial issues that investors and other company stakeholders look at to assess ESG performance:

• Environmental: Carbon emissions, air and water pollution, energy efficiency, water usage, waste management, deforestation, commitment to biodiversity, sustainability of supply chains  
  
• Social: Gender and diversity, labour standards, human rights, customer service, community relations, data protection and privacy, employee engagement, occupational health and safety
  
• Governance: Board management practices; board diversity; regulatory compliance; executive compensation; succession planning; diversity, equity and inclusion; bribery and corruption; lobbying; political contributions

Learn more about responsible investing

If you’re curious about aligning your investments with your values, don’t miss these helpful reads:

• What is socially responsible investing?
  Socially responsible investing means considering other factors besides financial returns when deciding what to invest in. Find out which factors to look at.
• Why sustainable investing is important
  An investment advisor explains key details about sustainable investing, its different approaches (impact investing, purpose-driven investing, divestment, etc.) and how to get started.
• An investor’s guide to ESG reporting in Canada
  Companies and investment firms that report ESG performance use a patchwork of standards—if they report at all. Here’s how to navigate sustainable investing.
• 5 ways to invest sustainably for Canadian investors
  If you want to make a positive impact with your investing choices, here’s how to consider ESG factors as part of your approach.
• Responsible investing is growing in Canada. Which ESG factors matter most?
  Investors are attracted to ESG as a tool to minimize risk and boost returns, according to a new report from the RIA. Here’s what asset managers look for.
• Greener days ahead: There’s a new global standard for climate-related disclosures
  New ISSB guidance on climate-related disclosures will make it easier for Canadian investors to see which companies will be ready for the net-zero economy.
• Attention, ESG investors: Canada’s biggest carbon-emitting public companies
  Are Canadian companies making progress on carbon emissions? Climate Engagement Canada’s new net-zero assessments show there’s still a long way to go.
• The cost of socially responsible investing
  What options are available to Canadians who want to start investing responsibly? MoneySense columnist Jason Heath explores products, performance and fees.
• Two simple and cheap portfolios for sustainability-minded investors
  Writer Tim Nash shares two model portfolios—using Vanguard and iShares exchange-traded funds (ETFs)—that incorporate both financial strategy and social/environmental good.
• Halal investing in Canada
  Canadian Muslims have unique investment needs. Jason Heath shares options that are compatible with Shariah law, including Halal mutual funds.
• Investing with your conscience
  For investors interested in putting their money where their personal values are, the growing offering of ESG funds may be of interest. But are they different enough from regular index funds to matter?

• Is ethical investing good for your portfolio?
  Portfolio manager John de Goey shares his thoughts on ethical investing and investment returns.
• How to invest more sustainably in crypto
  Each year, crypto mining uses huge amounts of energy and generates millions of tonnes of carbon emissions. How can we green the future of crypto?

More ways to celebrate Earth Day

On April 22, you can join other concerned citizens to support the planet, whether you pitch in at a local cleanup, take environmental actions at home or attend a virtual Earth Day event. You can also check out our editors’ favourite eco-friendly products and strategies.

The first Earth Day was observed in 1970 in the United States, marking the beginning of the modern environmental movement. In 1990, Earth Day went global, mobilizing millions of people to take action for the planet; that year also marked the founding of Earth Day Canada.

Now, more than 50 years after the inaugural campaign, Earth Day engages one billion people each year in environmental efforts large and small. As the devastating effects of climate change become increasingly clear around the world and right here at home, Earth Day’s message has never been more urgent.

To find Earth Day events near you, visit the global campaign’s official website or Earth Day Canada.

Read more about investing: 

• Best FHSAs in Canada: What to know about the new first home savings account
• Best ETFs in Canada
• Best TFSAs in Canada
• Canada’s best dividend stocks

About MoneySense Editors

MoneySense editors and journalists work closely with leading personal finance experts in Canada. Since 1999, our award-winning magazine has helped Canadians navigate money matters.

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