Responsible investing is becoming more focused on managing risks for clients in a changing market.Sumedha Lakmal/iStockPhoto / Getty Images
If responsible investing (RI) was once characterized as the domain of do-gooder investors with their heads in the clouds, it’s becoming ever more grounded in reality.
“I would say 2026 is going to be the year in which we actually see responsible investment grow up,” said Dan Zilnik, partner, sustainability advisory with EY, speaking Wednesday at a Responsible Investment Association webinar.
The world has changed, and so has the industry’s focus, according to Mr. Zilnik and the other panellists on the RIA webinar. As climate effects become harder to ignore, adaptation is more important, while geopolitics has complicated the approach to defence and energy security. And then there’s artificial intelligence and the angst around jobs and energy-intensive data centres.
The result is a more focused approach to RI grounded in the fiduciary duty to manage risks for clients in a changing market, as reflected in the RIA’s 2025 Canadian Responsible Investment Trends Report released last fall.
“It’s the year in which we see that the fundamentals stay in place as a fiduciary element, not as a values-driven piece,” Mr. Zilnik said.
One of the most significant changes, which began after Russia’s invasion of Ukraine almost four years ago but has become more pronounced, is the approach to defence.
Governments have increased spending in response to U.S. pressure and to a less stable world, creating investment opportunities, and some investors view these opportunities with a more open mind.
Melanie Adams, managing director and head of RI at RBC Global Asset Management, characterized 2026 as “the year of defence” as money managers grapple with their approach to weapons spending in portfolios.
That may require more nuance and careful review of terms such as “controversial weapons” as they apply to screens on weapons manufacturers, for example, while maintaining outright bans in certain cases.
“If we don’t have weapons, if we don’t have defence spending, there are human rights issues, there are social issues,” Ms. Adams said on the RIA panel. “We’re seeing that right now. So, how are we protecting against these other ripple effects if we don’t think about it from that particular lens?”
Mr. Zilnik said Russia’s war against Ukraine exposed elements of energy security and geopolitical risks that may not have been included in RI frameworks, and investors are still adjusting.
“It’s such a complex topic, both the value chain and the idea of weapons as a form of actually standing up and defending a global geopolitical rules-based order versus destroying it,” he said.
Another change is the approach to climate. Discussions about the ability to adapt to a changing climate used to be limited to certain sectors and companies with physical assets or exposure to flood or wildfire risk, Ms. Adams says. That’s changing as more people and companies face extreme weather.
The risks are especially relevant for investments in “long, linear infrastructure,” such as highways, power lines and pipelines, Mr. Zilnik said, and for private market investors with long time horizons.
“The focus on resiliency has really increased,” he said, as investors look at operating assets for 30 to 50 years, during which extreme weather events are likely to become more frequent.
Tech companies are becoming a bigger part of the climate conversation as their energy needs rise dramatically with the AI data centre buildout, he added.
And AI is also becoming more of a focus on the governance side. Some companies may need to have AI expertise on their boards if there’s a major change in the products offered or in the workplace resulting from the technology, Ms. Adams said.
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