Report finds interest in the industry is not being reflected in portfolios
The energy transition is one of the largest ever changes in how the world is run and that means opportunity for investors. But Canadians are missing out according to a new report.
Mackenzie Investments’ Sixth Annual Earth Day Study has found that even though 56% of respondents believe investing in companies that are driving the energy transition will bring long-term positive performance – and two thirds say these companies will create a better world for future generations – just 6% are aware of how to start investing in this space.
Despite potential for strong returns in a US$4.5 trillion industry, only 14% of respondents are currently invested in energy transition opportunities and only one in ten said they are likely to in the next two years.
"It's encouraging to see how many Canadians recognize the value of investing in the energy transition – it's a critical part of our economic and environmental future," said Fate Saghir, SVP, Sustainability, Mackenzie Investments. "But awareness on how to access these opportunities remains low. That's where seeking financial advice can make a real difference – financial advisors can help clients understand where these investments exist, which ones have the potential to deliver strong performance and how to integrate them into a well-diversified portfolio."
The lack of investment in this opportunity by Canadian investors can be at least partly explained by their view that sustainable investing lacks clear guidelines or standards (41% said this) and greenwashing is a concern: 34% said it is a major concern while 62% said it is a major/moderate concern.
"The concerns of Canadians are very much warranted," added Ms. Saghir. "We believe that these will be addressed through disclosure standards meant to address greenwashing concerns."
