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How to incorporate Responsible Investing into annual planning

Feb 04, 2025 | RBC Wealth Management


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Explore the latest themes in responsible investing, growing opportunities in wind energy and blue tech, as well as practical tips for incorporating RI into annual planning.

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New year, new goals?

The start of a new year offers a good opportunity to review your personal as well as financial goals. Being aware and cognizant of your plan is crucial, and as you reflect on the past year and look ahead toward the future, it can be a prudent time to decide to either make some changes or stay the course.

Have you considered incorporating new solutions into your investment portfolio? Have you considered responsible investing and how to incorporate it into your portfolio?

New topics

Responsible investment is still a new topic for many to understand. Learning the terminology is step one. Many individuals have different definitions of what responsible investing means to them, and this can lead to the various applications of responsible investing: integration of environmental, social and governance (ESG) factors; ESG screening and exclusions; thematic ESG investing; and impact investing.

Investors can implement responsible investing into their portfolios through several strategies and across different asset classes. These approaches are not mutually exclusive. An investment product or portfolio can incorporate more than one strategy, and multiple strategies can be applied simultaneously within the investment process.

An investor may be interested in exploring the various approaches to better understand if and when a particular approach may fit into their financial plan. We think now is an opportune time to understand the definitions and to consider any future portfolio implementation.

Determine your approach

Different goals may lead to a different responsible investing approach, as you may want to:

• Incorporate material ESG data alongside traditional financial analysis

• Invest in companies with responsible environmental and social practices

• Exclude certain areas to align with personal values and beliefs

• Support specific themes, issues or causes

• Target innovations that aim to help solve social or environmental challenges

• Invest in a measurable impact

• Consider charitable or philanthropic giving strategies

Getting started

Education is a great place to start when it comes to investment-related topics. Reflect on when and how the various applications of responsible investing may fit into an investment portfolio. Contact your advisor to learn more about this topic and the capabilities available, including a copy of our Responsible Investing workbook. Generational wealth transfer presents an opportunity for families to further discuss this topic. Responsible investing can help bridge the generation gap as it can spark discussions around various family values and principles. Consider setting up a financial wellness check-in on your personal financial goals and to see how responsible investing may fit into your investment portfolio in the future.

 

 
Looking for additional insights about responsible investing?

Download our Q1 2025 Insights into responsible investing newsletter

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Disclosures

U.S. Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested.

 

In the U.S., RBC Wealth Management operates as a division of RBC Capital Markets, LLC. In Canada, RBC Wealth Management includes, without limitation, RBC Dominion Securities Inc. (RBC DS)*, which is a foreign affiliate of RBC Capital Markets, LLC. *Member – Canadian Investor Protection Fund. This document has been prepared by an employee of RBC Wealth Management in the U.S. for use by RBC Wealth Management in the U.S. and RBC DS in Canada. Each of the aforementioned corporate entities and the Royal Bank of Canada are separate corporate entities which are affiliated.

 

At RBC Wealth Management, Responsible Investing is an umbrella term encompassing the approaches used to deliberately incorporate environmental, social and governance (ESG) considerations into an investment portfolio. The application of certain approaches may cause a strategy to forgo investment opportunities available to strategies that do not use such approaches. This may cause those strategies to underperform a benchmark that does not consider ESG factors. There is no single definition for the use of ESG data therefore terminology may be different across the industry. Past performance is no guarantee of future results. This material has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. All opinions and estimates constitute the author’s judgment as of the date of this publication, are subject to change without notice and are provided in good faith but without legal responsibility. It is not possible to invest directly in an index. Nothing in this communication constitutes legal, accounting or tax advice or individually tailored investment advice. RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in connection with your independent tax or legal advisor. The information contained herein has been derived from sources believed to be reliable, but no representation or warranty, express or implied, is made by RBC Wealth Management, its affiliates or any other person as to its accuracy, completeness or correctness.

Jon Jacobson, NMLS # 1514426, and Daniel Prichard, NMLS # 2675357 through City National Bank, may receive compensation from RBC Wealth Management for referring customers to City National Bank. Banking products and services are offered or issued by City National Bank, an affiliate of RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC and are subject to City National Banks terms and conditions. Products and services offered through City National Bank are not insured by SIPC. City National Bank Member FDIC.

Investment products offered through RBC Wealth Management are not FDIC insured, are not guaranteed by City National Bank and may lose value.