What is Sustainable Investing and how can you learn more? 

This post has been brought to you in partnership with Scotia iTRADE. All thoughts and opinions are my own and do not necessarily reflect the views of Scotia iTRADE.

We’ve heard it all before.  Save early.  Save often.  Keep saving and put some of those savings into long term investments. Diversify your investments. Then stay invested, maybe by tuning out daily market noise and rhetoric.  And maybe the most important part, mind your money management fees while you invest.  Fees are forever.

It’s all true – good (financial) advice is not hard to find.

Navigating the investing landscape

While investment information is plentiful it’s also never been harder to sort through them to find the information and a strategy that’s right for you, for what you believe in.

  • Invest in indexed products?
  • Invest in dividend paying stocks?
  • What about investing using traditional mutual funds? What about value investing as a strategy
  • I’ve heard momentum investing, smart-beta or factor investing is getting more traction?

I can appreciate it’s challenging at times to navigate the investing landscape.  This is why I’m a big believer in sharing what I know on this site; ultimately good investing decisions originate with ample information.  After all, it’s your money.

I’ve chosen to invest directly in many Canadian and U.S. dividend paying stocks over the years.   In addition, I’m interested in investing in companies that are focused on making positive societal and environmental impacts around us.  I personally don’t invest in “sin stocks” such as tobacco companies for this reason even if they may have been otherwise appealing. Your investing decisions may vary.

Long before I started investing, smart companies and good management within those companies recognized what’s generally good for society could limit financial risk.   Welcome to the world of Sustainable Investing.

How can you decide what companies to invest in?

Tools to sort, filter and analyze companies related to their environmental, social, and corporate governance (ESG) activities have historically, like other sophisticated analytical tools, resided with institutional investors. That is, until now.

Scotia iTRADE has launched Canada’s first sustainable investing tools for direct investors to better inform them about the investing decisions they are making.  Access to ESG criteria and scores are now embedded within the online platform’s existing screeners, research reports and company data – for over 1,200 North American stocks.

As a DIY investor, who focuses on buying individual stocks in my portfolio, I’ve always been curious about such factors beyond the typical dividend metrics I screen for.  Using Scotia iTRADE’s sustainable investing tools you can see the ESG criteria displayed – it’s easy to filter companies with practices that align with your values.

Making an informed investing decision

Sustainable and responsible investing is, in summary, an approach that considers more than just the long-term competitive financial return to investors.  You have probably appreciated by now there are many motivations behind sustainable investing – for companies and prospective investors alike.  For retail investors like you and I, investors that embrace sustainable investing may be better equipped to manage their stock selection risk; ESG information can help provide insight into future company challenges but also highlight competitive opportunities that lie ahead.

With many investing choices these days, investors need to decide what their focus and priority is.  Considering answering the question:  what do you feel strongly about?  Is it avoiding some “sin stocks” like I do?  Whether your approach is the same or not you can decide with ample information at hand.  Inevitably all investors, including broad based fund investors, invest with some compromises.

At the end of the day, research that can be harvested for sustainable investing decisions is just one part of an investor’s toolkit.  Scotia iTRADE’s sustainable investing tools are exclusively available to Scotia iTRADE clients and these insights are provided by, Sustainalytics, who provide comprehensive performance ratings based on ESG factors for over 1,200 companies on the Toronto Stock Exchange and Russell® 1000 Index. Some examples include labour relations, clean energy usage, green initiatives and ethical business practices.

You can learn more about sustainable investing at scotiaitrade.com, they have videos, a whitepaper and infographics. You can also find out your own sustainability profile.

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and I'm now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Subscribe and join the newsletter! Follow me on Twitter @myownadvisor.

6 Responses to "What is Sustainable Investing and how can you learn more? "

  1. Hello Mark:
    I have been following your site for over six months now and find a lot of your comments in line with my approach. I am in my early 50’s and have had a million dollar portfolio, lost a majority of it and have now regained it back, so I would not consider myself a good investor but one who has learnt by trial and error (mostly error). I have no debt and currently my portfolio yields me 25 K plus in dividends.I could go on and on about my story as I believe I have a good one, that your readers would find interesting, but to get back to the question raised. I follow 55 stocks and ETF’s (I own 36) and find it difficult not to be invested in sin stocks as what companies do not have sum impact on the environment or peoples bad habits. Is the oil and gas industry not a sin stock or companies that sell fast foods, so investing in let say Altria Group is this a sin ?. Keep up the good work as I enjoy reading about your approach in my semi-retirement years.

    Reply
    1. Great to hear from you Jim.

      Nice to hear you’re “back” with your portfolio. $25k per year in dividends is great. If you’ve been following my blog, it is our goal to have $30k per year from TFSAs and non-reg. accounts + RRSP withdrawals and other income to enjoy an early retirement. However, we’ve got LOTS of work to do to reach that goal…

      I avoid Altria myself since although a great investment, I struggle with the products. That’s just me. The oil and gas industry is a tough one as well. Energy companies (some of them) may not have great ESG criteria but like you maybe, I find it hard not to own SU (for example) some diversification. Even the indexers own it. Investing always has some compromises but at least the aware investor knows that going-in, eyes wide open kinda thing.

      I appreciate the kind words about the site – we’ll keep working on our plan and having fun – you keep reading and telling others 😉

      Best,
      Mark

      Reply
  2. *sigh*
    Well, to each its own, even SJWarrioring through the stock market…
    You know it changes nothing if you don’t buy a part of capital of so called sin stock? The capital is already here.

    And a Sustainable Investing post in partnership with a bank is a joke, especially with Scotia and its last scandals.
    All that is only social marketing for them.

    I’m sorry if I’m sound blunt, it isn’t my intention, but I put things in perspective.

    Reply
    1. I have no problem with you sharing your opinion farcodev. From time to time, although I try not to do it all the time for many reasons, I do have partnerships with life insurance companies, tax firms, banks and more. There is compensation to help run the site, my time, etc. but the intent is also to educate and make people aware what is available so they can make their own decisions.

      On another note…how is your investing journey coming along?

      Reply
      1. Fair enough.

        It is coming good, as long as I pursue a certain discipline in the control of my budget.
        For now my overall yield is relatively aggressive, about 8.75% yearly, but I continue to use my value investing model on the companies and it is doing fairly good. Of course, as usual it is far from perfect but at my level and for the time I work on/with it, it is OK.
        I will normalize it in about 6 years when I will reach a certain level of income (between $10K and $11K); each year I can target stocks with good value, but with lower yield and a dividend growth feature, and mix it with more aggressive and undervalued companies.

        It is fun nevertheless 🙂

        Have a good weekend!

        Reply
        1. Aggressive indeed! 🙂

          I think the yield on my portfolio averages about 4.5%. Boring stuff, financials, utilities, REITs, things people can’t live without.

          Hard to find good deals of late so I will just start saving some cash for TFSA in 2018 soon.

          I meant to add….have a great weekend as well!

          Reply

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