Investors stay committed to sustainability, prioritizing risk and standardized reporting despite headwinds
Canada’s responsible investing sector continues to evolve even as growth expectations ease and the pressure of global anti-ESG backlash rises.
The Responsible Investment Association’s newly released 2025 Canadian Responsible Investment Trends Report paints a picture of an industry shifting from expansion to refinement and prioritizing risk mitigation, clearer reporting, and smarter climate action.
The report notes that environmental, social and governance integration remains nearly universal, with 96% of surveyed organizations applying ESG considerations across 87% of assets under management, highlighting that sustainability analysis is now a mainstream expectation for institutional investors.
Although enthusiasm has cooled compared to years of rapid acceleration, two thirds of respondents still expect responsible investing to grow, and only a small share foresee stagnation.
Survey participants say the biggest brake on progress isn’t performance anxiety or data uncertainty but negative ESG media campaigns abroad, which surged as the top deterrent to growth. Performance worries remain a concern, but confidence in reporting quality continues to hold strong, with 91% trusting their own disclosures.
“The global conversation around sustainable finance may be shifting, but our data shows that Canadian investors remain firmly committed to responsible investment.” says Patricia Fletcher, Chief Executive Officer of the Responsible Investment Association. “Investors are no longer asking whether sustainability belongs in financial analysis. The focus is now on how RI is implemented with integrity and impact.
The study highlights current organizational priorities:
- Managing long-term risk has further widened its lead as the top reason to apply ESG analysis
- Returns-focused motivations have dipped
- Fiduciary duty remains important
Respondents emphasized that regulation, consistent terminology, and independent assurance are key to strengthening trust.
Climate risk is now viewed as the number one catalyst for future responsible investment growth, after reclaiming the position it held in 2023.
Targets for greenhouse gas reduction are increasingly measured and tracked and critically, 84% of organizations with targets intend to maintain them, while a small number plan to strengthen them. None reported plans to weaken commitments.
Collaborative engagement continues to define the Canadian approach, with 76% maintaining commitment to collective stewardship initiatives despite legal and political tensions in other markets.
Social issues including human rights, labour practices, and Indigenous reconciliation remain influential in decision making criteria. Impact investing still leans toward a blend of social and environmental priorities, though clean-energy themes show a recent decline.
The report signals that Canada’s responsible investment movement is shifting into a new era focused less on claiming market share and more on deepening effectiveness, proof of impact, and regulatory clarity.
