Sustainable investing is the evolution of what was previously referred to as "ethical" or "socially responsible" investing. Sustainable investing incorporates environmental, social, and governance performance into the investment management process. These factors include:

 

Environmental 

Sustainable land use  
Climate change  
Water scarcity  

 

Social

Supply chain 
Aboriginal & community relations 
Conflict zones 
Cybersecurity 

Governance 

Executive compensation 
Corporate diversity 
Accounting standards 

 

Sustainable investment and relative returns 

Many individuals experience an internal moral conflict concerning investment decisions: their desire to make profitable investments to benefit themselves and their loved ones versus their desire to conduct their lives, including their investment decision-making process, in a manner consistent with their personal beliefs. Fortunately, time has shown we do not have to choose—we can do well and do good. As shown below, companies that qualified for the Canadian ESG Leaders index had a cumulative return of nearly double the broader Canadian market over a 15-year period from August 2008 to August 2023.

In hindsight, it should not be surprising that evaluating potential investments from a broader, long term and big picture view produces better results. Similarly, it is unsurprising that companies with higher gender parity in leadership roles produce better results.