If there’s any silver lining to come out of the COVID-19 pandemic, it’s that an increasing number of investors are thinking more carefully about the impact their holdings are having on the world.
In 2020, inflows into Canadian-based environmental, social and governance (ESG) funds topped $3.2 billion, while total net assets in ESG funds topped $22 billion, a 37% increase over the year before. The company also found that 12.3% of global asset managers have put a greater importance on ESG considerations since the pandemic began[1].
While interest in ESG investing was on the rise before the COVID-19 pandemic, people are paying even more attention to everything from climate change to the treatment of employees to pressing social causes. Combined with a push from CEOs of major corporations to identify ESG risks within their own businesses, and with more regulations – in Europe, but soon elsewhere – around sustainable finance-related disclosure requirements, interest in ESG will likely continue well into the future, says Priti Shokeen, head of ESG Research and Engagement at TD Asset Management Inc.(TDAM).
“There’s an ever-growing awareness about systemic risks that we are facing as a society such as our rapidly changing climate and social inequalities, and an unwillingness to keep the status quo, whether that’s through our personal values or through our investments.” she says. “The industry also reached an inflection point over the last two- three years with maturing ESG strategies and funds showing that ESG does not take away from investment performance. The COVID-19 pandemic was the first true test of that and ESG showed potential for downside protection.”
ESG’s evolution
Currently, assets under management (AUM) in Canadian-listed ESG-focused funds account for less than 1% of AUM in all Canadian funds – $22 billion compared to about $2 trillion, according to ISS – but that number could see a dramatic increase over the next several years.
For one thing, the market continues to evolve from its traditional do-no-harm focus, which mainly involved companies taking action against issues that could hurt their business, to one that’s more purpose focused, where doing something good – for communities, customers and the planet at large – drives business decisions.
With more people wanting to understand how companies they are investing in, are being responsible – that may be reducing their carbon footprint or offering staff at least minimum wage – businesses will need to be more transparent about their ESG risks, says Shokeen.
“Companies will be disclosing ESG risks more systematically, and that information will help people make better investment decisions,” she says.
It also helps that millennials are more ESG minded. Morgan Stanley found that while the interest in sustainable investing among all investors climbed to 85% in 2019 from 71% in 2015, it jumped to 95% in 2019 from 84% in 2015 among millennials[2]. That’s important because this generation will inherit billions of dollars from their boomer parents over the next decade.
Given their interest in ESG, much of that money will go into ESG-related funds and to the advisors who embrace sustainable investing.
“There is a greater willingness among millennials and increasingly among high net worth investors to act through their spending and investing,” notes Shokeen. “Advisors need to educate themselves so they can talk knowledgeably about these products, especially given the proliferation of ESG.”
More options for investors
As interest in ESG increases, so too will the kinds of products investors can buy. While a number of ESG-focused mutual funds have been created over the years, the ESG ETF market is one area that many investors and advisors are now focused on. ETFs by their nature are low-cost, highly liquid and easy to buy, which is ideal for someone who wants to build any portfolio, but especially one that has a particular focus.
Over the last few years, a number of ESG ETFs have come to market globally with different approaches – some focus on gender parity among executives or technologies that advance renewable energy, others simply remove fossil fuels from existing funds. TDAM, which has long been implementing ESG practices into its various mutual funds, has recently launched three ETFs that incorporate a variety of ESG approaches into one investment vehicle.
The three funds – TD Morningstar ESG Canada Equity Index ETF (TMEC), TD Morningstar ESG U.S. Equity Index ETF (TMEU) and TD Morningstar ESG International Equity Index ETF (TMEI) – give investors exposure to companies with high ESG ratings across a broad number of factors, including alignment of management compensation with shareholder returns, health and safety issues, environmental impact and more. The funds, which follow indexes designed by Morningstar, using ESG ratings provided by Sustainalytics, a Morningstar Company, also stay away from tobacco, weapons and gambling operations, as well as those companies that have been embroiled in controversies, such as bribery, corruption and human rights violations.
“With these ETFs, investors can access best-in-class ESG companies and also closely track the broad parent index,” she says. “The main idea is to provide a low-cost solution, that provides market-like return while having positive ESG exposure and aligns with your values”
As more companies take ESG into account, and as a greater number of investors seek out more responsible products, there may come a point when ESG will be fully integrated into investing mindset, however, says Shokeen, “the levels of integration within companies, and investment process will provide room for differentiated ESG investment strategies.”
Until then, Shokeen thinks that over the next five to 10 years, ESG related disclosures will remain a focus and we’ll see an increasing push towards standardization, while responsible investing will go even more mainstream.
“At a simple level, this is common sense,” she says. “Companies that negatively impact their environment or people will get penalized, while the ones who take it seriously will get more attention from investors.”
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
