This post is sponsored by RBC InvestEase Inc. All views and opinions expressed represent my own and are based on my own research of the subject matter.

Responsible investing is something on the minds of many investors today. They’re concerned about the environmental, social, and governance (ESG) aspects of economic activities. Once considered a fringe movement, retail investors increasingly want to incorporate these considerations into their investment decisions.

With a Responsible Investing Portfolio, like the one offered by RBC InvestEase, investors can help drive positive change by investing in companies aligned with their values without necessarily giving up financial returns.

What is responsible investing? How is it different from “standard” investing?

Responsible Investing (RI) describes an investment approach that measures how a company manages its Environmental, Social and Governance (ESG) risks in the operation of its business.

  • Environmental factors include: Carbon emissions, waste disposal, water management.
  • Social factors include: Workplace health and safety, labour management, privacy/data security.
  • Governance factors include: Tax transparency, board independence and composition, ownership.

The Responsible Investing approach used in RBC InvestEase’s portfolios focuses on companies with the highest ESG factors. The process removes companies involved in the business of tobacco, controversial weapons, and civilian firearms while also omitting companies involved in severe controversies. The remaining companies are assessed on how effectively they manage their ESG risks.  The RBC InvestEase Responsible Investing portfolio emphasizes companies considered to be better managers of these risks versus their industry peers.

Open an RBC InvestEase account today and pay no management fees for 12 months!*

Who is responsible investing for?

It’s a personal choice.

The key is having that choice. RBC InvestEase offers both a Responsible Investing and a Standard portfolio to help clients reach their financial goals. I happen to think that any investor who contributes regularly and has the discipline to stick with their strategy will be successful with either approach.

Responsible Investing will appeal to those looking for choice and wanting to invest with companies that effectively manage environmental, social, and governance risks.

For those who are more focused on fees, or who are not drawn to Responsible Investing, a Standard portfolio remains an excellent solution.

Performance:

Can you expect the same kind of performance from responsible investing as what you’d expect from “standard” investing?

According to RBC InvestEase, they’ve selected an investment approach to Responsible Investing that should not result in lower returns after fees versus a standard portfolio over the long term.

Fees:

One of the knocks against Responsible Investing has been the relatively high fees to gain access to a managed portfolio. So, does it really cost more to invest responsibly?

RBC InvestEase charges the same low fee of 0.50% to manage both their Standard and Responsible Investing portfolios.

Responsible Investing RBC InvestEase portfolio fees

The ETFs used in the construction of RBC InvestEase’s Responsible Investing portfolios have a slightly higher management expense ratio (MER) versus their Standard portfolios. Put into dollar terms, if you pay a 0.07% higher MER on a $25,000 portfolio that’s only an extra $17.50 per year to invest in a Responsible Investing Portfolio.

Final thoughts

The world of investing is changing for the better with more individuals and companies linking sustainability efforts with the long-term health of organizations and the economy as a whole.

It’s possible to build an investment portfolio while also doing good things with respect to people and the planet.

Open an RBC InvestEase account today and pay no management fees for 12 months!*

*RBC InvestEase will pay boomerandecho.com a one-time fee when you open an account managed by RBC InvestEase, invest $1000 at account opening and maintain a minimum investment of $1000 for 90 days after the date of account opening.

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