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Misconceptions about costs discourage sustainable investing

(CNW Group/The Co-operators Group Limited)

TORONTO — The perceived cost of going “green” has many Canadians wondering if they can afford to invest sustainably, despite their interest in doing so. A new survey from Co-operators reveals three-quarters (73 per cent) of Canadians believe that products and services from sustainable companies cost more, and over half of survey respondents (53 per cent) say they were interested in supporting sustainable companies before rising inflation, living costs and interest rates “made things too expensive.” Younger Canadians appear most offput, as the latter figure rises to 62 per cent among those aged 18 to 24.

The findings perpetuate a misconception that sustainable investing – also called ethical or socially responsible investing – equates to financial concessions. According to the survey, despite widespread agreement on the importance of sustainability (73 per cent) and the importance of supporting sustainable companies (62 per cent), less than a quarter of Canadians (23 per cent) say they are willing to pay a premium for sustainable investment products.

“The survey results are enlightening,” said Rob Wesseling, President and CEO of Co-operators. “While Canadians clearly understand the need to support sustainable initiatives, misleading information about the costs could be holding some investors back. It’s critical that Canadians are educated about the availability of investment products and solutions that enable them to make a substantive social difference, alongside compelling financial returns. At its core, sustainable investing ensures that financial security and societal betterment go hand in hand.”

Some funds with ESG or sustainability mandates perform as well or better than those without the sustainable label and the costs associated with sustainable investing – like any other type of investment strategy – vary based on the fund company, portfolio, asset class and management structure.

“As an investor, it’s important that you’re empowered with the information you need to align your investment strategy with your values,” said Jessica Baker, Co-operators EVP of Retail Wealth. “The idea that investors have to sacrifice performance or pay more to go ‘green’ with their investment portfolios simply isn’t true,” Baker adds. “How much or how little investors pay in fees or generate in returns, depends on their risk appetite and investment strategy.”