Ethical investing in Canada: how to grow your money without harming the planet

Have you ever looked at your investments—or maybe just your savings—and wondered, “Is my money supporting things I actually believe in?” If so, you’ve already taken the first step toward ethical investing.

If the answer is “I’m not sure” or even “probably not,” you’re not alone. More and more Canadians are starting to think beyond just returns and looking at where their money is going. And the truth is, your dollars could be working hard for you—and for the planet—at the same time.

That’s where ethical investing comes in.

Also called responsible investing or ESG investing, this approach is all about putting your money into companies and funds that care about things like the environment, human rights, and fair governance.

It’s not just for environmentalists or finance nerds. It’s for anyone who wants their investments to reflect their personal values—without sacrificing long-term growth.

In this guide, I’ll walk you through what ethical investing means in simple terms. We’ll cover:

• What ESG actually stands for (and why it matters)
• The difference between ESG, SRI, and impact investing
• Real Canadian examples of ethical funds and ETFs
• A step-by-step guide to building your own sustainable portfolio
• Tools, platforms, and resources to make it easy—even if you’re just starting out

What is ethical investing, really?

At its core, ethical investing means aligning your financial goals with your personal values. It’s about asking not just “Will this make me money?” but also “Is this company doing good in the world?”

That’s where the concept of ESG comes in:

• Environmental: is the company reducing its carbon footprint, protecting natural resources, or addressing climate change?
• Social: does it treat its employees fairly, support diversity, and give back to the community?
• Governance: are they transparent? is the leadership ethical and accountable?

By choosing companies with strong ESG practices, you’re supporting businesses that are building a better future—and you’re often avoiding risks that come with unethical practices (like lawsuits, scandals, or environmental disasters).

ESG vs. SRI vs. impact investing: what’s the difference?

Term	What it means	Main focus
ESG investing	Considers environmental, social, and governance criteria	Risk + returns + values
SRI	Socially responsible investing, avoids harmful industries	Aligns with specific ethical views
Impact investing	Invests directly in companies/projects doing good	Measurable social or environmental impact

Why ethical investing isn’t just good—it’s smart

People used to think investing ethically meant giving up returns. But that’s just not true anymore.

Here’s why ethical investing makes sense—financially and morally:

1. Better risk management: ESG screening helps avoid companies with reputational or regulatory risks.
2. Competitive returns: ESG funds have matched or even outperformed traditional funds in many studies.
3. Feel-good factor: you’ll know your money is aligned with what you believe in.

🌿 Real-world example: RBC vision balanced fund

This fund invests in companies with strong ESG scores. Between 2019 and 2023, it delivered a 7.2% annual return, proving that you can invest ethically without missing out on growth.

How to start ethical investing in Canada: step-by-step

Step 1: know what you care about

Ask yourself:

• Do I want to avoid sectors like oil, weapons, or tobacco?
• Am I passionate about climate change, social justice, or women in leadership?
• Am I okay with a bit more risk for a bigger impact?

2: choose your account type

• TFSA: tax-free growth, flexible withdrawals
• RRSP: tax-deductible contributions, great for retirement
• Non-registered: more flexibility, but taxable

3: pick how you’ll invest

Option	Best for	Popular platforms
Robo-advisors	Beginners, hands-off investors	Wealthsimple, Questwealth ESG
DIY investing	Those who like more control	Questrade, TD Direct Investing
Advisors/planners	Personalized advice, large assets	Your bank or certified planner

4: select ESG funds, ETFs or stocks

Look for Canadian options like:

ESG ETFs

• BMO ESGA – MSCI ESG Leaders Index
• iShares XEN – Jantzi Social Index
• RBC RLDR – Women’s Leadership ETF

Mutual funds

• NEI Environmental Leaders Fund
• Desjardins SocieTerra Positive Change Fund
• Mackenzie Greenchip Global Environmental Fund

Tip: always check the fund facts for ESG scoring, top holdings, past performance, and management fees (MER).

Step 5: review and rebalance

Use tools like Morningstar ESG ratings to keep your investments aligned with your values. Set reminders to review annually.

Let’s bust a few myths

“Isn’t it just a trend?”

Nope. ESG investing is on track to hit $50 trillion globally by 2025.

“It’s too complicated.”

Platforms like Wealthsimple offer ready-made ESG portfolios you can invest in within minutes.

“It won’t make money.”

Research shows ESG funds can match or outperform traditional investments—especially during downturns.

Handy tools and resources for Canadians

Platform	What you can do	Website
Wealthsimple	Automated ESG portfolios	wealthsimple.com
Questrade	DIY trading, access to ESG ETFs	questrade.com
Morningstar Canada	Fund research, ESG ratings	morningstar.ca
RIA Canada	Guides, ESG investing research	riacanada.ca

Invest with purpose, grow with peace of mind

Ethical investing in Canada isn’t just possible—it’s powerful. Whether you’re passionate about climate change, human rights, or corporate responsibility, there are options out there that let you build wealth and make a difference.

You don’t need to be rich. You don’t need a finance degree. All you need is the willingness to start.

So ask yourself: what do I want my money to support?
Then take the first step toward building a portfolio that reflects not just your goals—but your values too.