The study found that 8% of respondents were currently investing in sustainable investment–related mandates and strategies. Of that group, 91% said sustainable investing (SI) was important to them. About six in 10 (62%) respondents overall said they intended to pursue SI in the next 12 months.
However, about half (51%) of current and future SI investors allocated less than 25% of their portfolios to sustainable investments or intended to do so. Only 17% said they would allocate more than 50% of their portfolios to sustainable investments.
“If nearly all SI investors say sustainable investing is important to them, why does their behaviour suggest otherwise?” the study asked.
It found a difference in terms of ESG issues that investors found important to them versus those they found important as an investment strategy.
For instance, privacy and data security was the top ESG-related issue (falling under governance) cited by respondents, with 74% having said it was “very important.” Despite this, “it was not an SI issue that investors would be willing to consider for their portfolios” if such an investment existed, the study stated.
After privacy and data security, other SI issues respondents found “very important” were responsible water management (70%), workplace and worker health and safety (69%), product safety and quality testing (67%) and human rights (also 67%).
While social issues made up three of those top five, environmental issues turned out to be the most important ones that investors considered for their actual investment strategies. Theses consisted of clean energy sources (60%); carbon and other greenhouse gas emissions (53%); biodiversity, land and water protection (46%); responsible water management (44%); and waste management (also 44%).
There are plausible explanations for the difference between what’s important to clients and what their actual investing practices are, the study said.
“One of the most logical [reasons] may be that what people feel doesn’t always translate into what people do,” it said. Behavioural science calls that the “say-do gap.”
Another possibility may be that investors who already incorporated environmentally focused mandates in their portfolios see those mandates as having a proven performance history compared with those focused on social issues, “which are just starting to gain in popularity,” the study said.
Yet another possible explanation is that the “status quo effect” could be at play; namely, those invested in environmental funds may already view themselves as sustainable investors and therefore see no need to diversify into other SI areas.
The study suggested that, to build the right SI strategy for clients, advisors need to ask them more than which SI issues are important to them.
“A thorough discovery process that includes exploration of the client’s goals and risk tolerance can help to focus potential sustainable investing recommendations to the client’s specific needs,” it said. “[J]ust because an issue is important to a client, it does not mean that they will want to make it part of their investing strategy.”
Maru Group conducted the online survey on behalf of TD Wealth between Oct. 22 and Nov. 9, 2021, in both English and in French, with geographic distribution across Canada.
The polling industry’s professional body, the Canadian Research Insights Council, says online surveys can’t be assigned a margin of error because they don’t randomly sample the population.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
