Investing For a Better World

Investing For a Better World
Can you envision a society in which economies have moved away from extractive and destructive activities, and toward creating value for all stakeholders? A world with fewer cases of asthma, cancer or other diseases? And fewer diseases concentrated in poor communities or communities of color, plus where more people can afford health insurance because they are paid better?

Welcome to sustainable investing!  Some investors believe one of the largest market inefficiencies is a failure to factor in non-financial factors into investment decisions. Impact investing or ESG investing means to consider environmental impacts, social benefits, and corporate governance factors when making investment decisions. Though this has not been traditionally how investments are considered, this lens is useful for screening for big risks and to find opportunities missed by others. All ESG issues have financial ramifications and should be evaluated diligently.  For example, a company with a record of water pollution, a bad reputation in the community, or accused of treating its workers unfairly might have its stock underperform in the long run.

In 2025, Bloomberg Professional Services reported the total and risk-adjusted returns for global public equities (stocks) and found that companies with higher Bloomberg ESG Scores outperformed those with lower ESG scores between February 2017 and March 2025. (1)  Sustainability was a top-three priority for C-Suite business leaders surveyed by Deloitte in 2025, with 66% of executives saying their sustainability actions have a positive impact on revenue generation. (2)

Responsible investing for a portfolio can achieve specific financial and impact goals by investing in marketable securities as well as with alternative investments. I encourage investors to begin with their own portfolio, but also to consider the portfolios of any family foundation, non-profit, or other organizations that they admire. For health professionals, this could mean asking the health system where you work to align its investment portfolio with its day-to-day efforts building healthy communities. Could your church, synagogue or mosque align its portfolio with its message of love and kindness? Could the climate justice and social equity themes that are important to health and wellness be incorporated into the portfolios of the people and organizations you care about?

Here are some things you can do:

• Learn what you own. Consider researching your mutual fund holdings to learn how well your funds are rated.  Your financial planner or advisor can point you to websites of commonly used ESG rating organizations.
• Ask your financial planner or advisor what options are available to you for sustainable investing.
• Consider getting a second opinion from an advisor who has a track record of solid financial returns and responsible investing.

Here are some questions to ask your advisor:

• How do you approach responsible investing for the environmental and equity?
• How can I integrate these themes throughout my portfolio?
• How do I maintain a diversified asset allocation?
• How will sustainable investing affect my financial returns?
• What are the tax implications based on my existing holdings?

About the Author:  Michelle Schiro is a First Vice President and Financial Advisor in the SRI Wealth Management Group at RBC Wealth Management. SRI consults on $4 billion of assets owned by foundations, non-profits, and families. Their clients wish to meet their financial goals while having their portfolios aligned with their mission or values. SRI assists as well with wealth planning, intergenerational wealth management, estate and trust planning, strategic philanthropy, and legacy planning. Michelle can be reached at 415.445.8232 or michelle.schiro@rbc.com.

Sources:
(1) https://www.bloomberg.com/professional/insights/sustainable-finance/are-esg-scores-relevant-for-portfolio-returns/

(2) https://www.deloitte.com/global/en/issues/climate/c-suite-sustainability-report.html

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.

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. 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.

Past performance is no guarantee of future results.

Neither RBC Wealth Management, a division of RBC Capital Markets, LLC (“RBC WM”), nor its affiliates or employees provide legal, accounting or tax advice. All legal, accounting or tax decisions regarding your accounts and any transactions or investments entered into in relation to such accounts, should be made in consultation with your independent advisors. No information, including but not limited to written materials, provided by RBC WM or its affiliates or employees should be construed as legal, accounting or tax advice.

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