Have ESG Stocks Paid Off?

Here's the situation with sustainable investments in Canada so far.

Andrew Willis 24 September, 2021 | 4:22AM
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Stock return chart

Do stocks with lower ESG - environmental, social and governance - risk yield better returns? It's complicated. Responsible, sustainable and ESG investing carries many names and is subject to various interpretations. So then how do we measure performance? As the space continues to solidify, finding patterns in the performance of Canadian stocks is already challenging enough. Let’s start with ESG Risk Ratings.

“At its core, an ESG Risk measure on a stock is meant to reflect that degree of financially material risk that is associated with Environmental, Social, and Governance type topic areas,” says Morningstar Canada’s Direct of Investment Research, Ian Tam, “These are not meant to be ‘feel-good’ factors. Rather, they reflect the realities of outcomes that will materially affect a company’s bottom line.”

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About Author

Andrew Willis

Andrew Willis  is Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.


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