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How 2021 Became the Year of ESG Investing

Investors concerned about climate change and social justice had a bumper year in 2021, successfully pushing companies and regulators to make changes amid record inflows to funds focused on environmental, social and corporate governance (ESG) issues.

A record $649 billion poured into ESG-focused funds worldwide through Nov. 30, up from the $542 billion and $285 billion that flowed into these funds in 2020 and 2019, respectively, the lates Refinitiv Lipper data shows. ESG funds now account for 10% of worldwide fund assets.

Regulators have responded to the new pressure by making ESG disclosures a priority. The U.S. Securities and Exchange Commission (SEC) has been asking money managers about the ESG classifications they use for their funds and is expected to firm up guidance on corporate disclosures such as carbon emissions.

The European Commission has finalized most of its “sustainable finance taxonomy” rulebook on which corporate activities can be labeled climate-friendly. Rules will apply to some sectors in the European Union starting January 2022. 

Major wins for ESG investors pushing for changes at companies this year included the replacement of three directors at Exxon Mobil, the rejection of a $230 million pay package for General Electric Co’s CEO Lawrence Culp, and a successful call for Union Pacific to make public its workforce diversity statistics. *Source: Reuters

If you want ESG to be more of the core of your investing, please let us know! Ryan is a Senior Wealth Advisor and a Responsible Investment Specialist and has done a great deal of research in this space. Companies as a whole are facing pressures to become leaner and greener and it’s also great for long term returns!

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iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and a business name under which iA Private Wealth Inc. operates.

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