Impact investors want proof their dollars make a difference.
But with anti-greenwashing legislation leading to greenhushing
among companies and investment funds alike, it’s gotten harder for investors to get the data they need to understand whether their investments are supporting companies that prioritize outcomes like cleaner air, stronger communities and a healthier planet.
This is happening globally, and Canada is no exception. Bill C-59¹, which came into effect last year, tightened écoblanchiment rules under the Competition Act. The result has been a pullback in ESG communications, as many companies fear that a misstep could bring legal, financial or reputational risk.
And their caution isn’t misplaced.
Recently, regulators took action against² an investment firm for allegedly misleading ESG-related claims. This case has the industry on alert, prompting a careful re-evaluation of everything from fund names to ESG disclosures, even among companies that continue to advance their sustainability work behind the scenes.
And it’s not just fund managers that have scaled back their ESG marketing language. Many companies are feeling the effects of a cooler regulatory and political environment and pulling back accordingly³.
So what does this mean for impact investors? And how can you still be confident your investments are driving real change?
At Genus, this shift reinforces a practice we’ve long held: using rigorous data and careful measurement in all of our investment-related decision-making. Here’s how values-based investors can make sure their portfolios are built on evidence and aligned with what matters most.
Data is critical for due diligence
In today’s climate, good intentions and cautious messaging aren’t enough to ensure meaningful impact. Investors need verifiable data that goes beyond marketing claims.
“We use a variety of sources to make sure we understand the full scope of every company,” says James Dick, Senior Sustainable Investment Associate at Genus, citing third-party data providers such as Développement durable, MSCI ESG Manager et Impact cubé.
These data partnerships help ensure every investment is backed by credible proof points on each of the three ESG pillars:
Environmental
- Scope 1 and 2 carbon emissions
- Carbon intensity, measured by tons of CO₂ per million USD in revenue. (“This gives us a relative score,” Dick says. “Larger companies naturally emit more, so we look at efficiency per dollar produced.”)
- Biodiversity, including sustainable and traceable sourcing practices
- Water use and treatment
Social
- Major controversies and conflict with Indigenous communities
- Equity in hiring, promotion and support for marginalized groups
Governance
- Gender representation on boards
- Independent directors, rather than concentration of power with CEOs or chairs
- Mechanisms for investor input into strategy and oversight
On top of these data points, our impact holdings also align with 14 of the 17 United Nations Sustainable Development Goals, a reflection of how data-driven investing can support global progress.
“Within our High Impact and Fossil Free funds, this data plays a role in our investment decision making,” Dick says. “We always want to make sure we’re providing value for our clients in impact investing.”
A quantitative lens on impact
Detailed data like this allows us not only to filter out companies that aren’t making substantial ESG impacts, but it’s also how we find companies that are increasing their impact over time.
Our quantitative models allow us to analyze thousands of companies at once, integrating both macroeconomic trends and ESG performance indicators so we can explore potential links between sustainability practices and financial performance.
“Through MSCI, Sustainalytics and Impact Cubed, we’re able to leverage the research of thousands of analysts to support our decision making,” Dick explains. “For example, the Genus High Impact Equity Fund’s investment process requires that all companies first pass ESG screenings, then we assess both fundamentals and impact performance. We look at how the company’s revenue is generating impact, and how they’re improving over time.”
Our portfolios are reviewed monthly using the latest available data. If new controversy data emerges, we assess the holding and may divest if we need to. This process is designed to help portfolios remain aligned with clients’ stated values and responsive to changing conditions.
Turning regulation into an impact advantage
Here’s how we see it: a tighter regulatory environment isn’t a setback for impact investing – it’s a chance to raise the bar. Companies that can substantiate their claims with concrete data will stand out in a market increasingly focused on transparency and accountability.
For impact investors, that translates to greater confidence in how their capital is used and a clearer link between purpose and performance.
And when you take the time to dig into these details, you’ll quickly see which funds are walking the talk, and which are just using the right buzzwords.
The bottom line is, if you’re evaluating an impact fund, don’t just take the label at face value – dig into how the data is gathered, verified and used to drive decisions.
Here are a few questions worth asking:
- Where does the data come from? Look for funds that source their ESG data from credible, independent providers rather than relying solely on self-reported company information.
- Is the data verified or audited? Independent validation helps ensure that impact claims hold up under scrutiny – not just in marketing materials.
- How often is the portfolio reviewed? ESG landscapes shift quickly. Ask how frequently the fund updates its holdings to reflect new controversies, disclosures or improvements.
- Is the methodology transparent? A reputable firm should be clear about how it screens and evaluates companies. If that process feels vague, it could be a red flag.
- How is impact defined and measured? Real impact is measurable. The best funds report their progress using clear, comparable metrics – not just aspirational language.
If you’re interested in exploring impact investing, speak with a Genus advisor about our des services d'investissement fondés sur des valeurs.
This document was prepared for general information purposes only and should not be considered a substitute for specific professional advice. In particular, its contents are not Intended to be construed as the provision of investment, legal, accounting, tax or other professional advice or recommendations of any kind, or to form the basis of any decision to do or to refrain from doing anything. As such, this document should not be relied upon for investment or other financial decisions and no such decisions should be taken on the basis of its contents without seeking specific advice. Genus has relied upon the accuracy and completeness of certain data and information obtained from third parties. It should also be noted that past performance is no guarantee of future results.
Références :
Media. (2024, June 25). From greenwashing to green trust: How Bill C-59 strengthens regulations and protects Canadians – Canada Climate Law Initiative. Canada Climate Law Initiative. https://ccli.ubc.ca/bill-c-59-anti-greenwashing/
OSC announces allegations against Purpose Investments Inc. and Mr. Som Seif. (2025, September 15). OSC. https://www.osc.ca/en/news-events/news/osc-announces-allegations-against-purpose-investments-inc-and-mr-som-seif
The Great Greenhushing: Companies retreat from ESG amid regulatory uncertainty. (2025, April 8). Adviser Voice. Retrieved November 17, 2025, from https://www.adviservoice.com.au/2025/04/the-great-greenhushing-companies-retreat-from-esg-amid-regulatory-uncertainty/
