CIFSC releases inaugural list of Canadian responsible investing funds

The Canadian Investment Funds Standards Committee (CIFSC) has classified 383 mutual funds and ETFs as responsible investing funds under its RI identification framework, which launched officially on Monday.

The framework was released in July 2022 with the goal of helping investors and advisors identify and compare responsible investing funds, and a draft version of the fund list had been released in November for feedback.

“We hope that advice givers and investors alike are able to use this framework to compare products and moreover empower insightful and valuable conversations,” said Danielle LeClair, director of manager research with Morningstar and chair of CIFSC, in a release.

The framework classifies the universe of Canadian-listed and domiciled responsible, sustainable and ESG funds into six categories:

• ESG integration and evaluation (e.g., ESG index investing; ESG rules-based funds) – 315 funds
• ESG thematic investing (e.g., cleantech and board diversity funds) – 92 funds
• ESG exclusions (e.g., funds that use negative screening) – 271 funds
• Impact investing (e.g., funds that intend to generate a measurable social impact) – 34 funds
• ESG engagement and stewardship activities (e.g., funds with managers that propose and/or vote in support of climate-related proposals) – 128 funds
• ESG best in class (e.g., ESG leaders funds) – 164 funds

Funds may fall into more than one category.

The RI identification framework complements the Canadian Securities Administrators’ guidance from January 2022 — in fact, the six CIFSC categories line up with the common ESG strategies the regulators included in staff notice 81-334 for illustrative purposes.

The six categories also align with the CFA Institute’s global ESG disclosure standards for investment products, though compliance with these standards is not a requirement to be identified under CIFSC’s framework.

CIFSC has previously emphasized that the framework is not a labelling standard, rating or certification, and inclusion in a category does not indicate whether a fund adequately achieves its stated mandate.

New funds will be reviewed monthly as they launch, and CIFSC will also review requests to have funds added or removed from the RI list monthly.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.