With rapid advances sparking broad enthusiasm for artificial intelligence, and with Big Tech spending billions to build infrastructure to meet the expected demand, even going so far as to reactivate Three Mile Island, investors rode a tsunami of rising valuations and increasing returns. Everyone with index funds in their portfolio – especially those tracking indexes that include U.S. equities – benefited one way or another from the AI trend. And even though markets were recently thrown into chaos over news about potentially disruptive AI tech out of China, most observers think the gold rush in AI isn’t over.

Last year was a good one for buyers of sustainability-focused index funds, too. Exchange-traded funds were popular in general: global net inflows nearly doubled in 2024 to more than US$1 trillion. While not often outperforming the broader market, sustainable ETFs all experienced strong growth, with the “Magnificent Seven” tech companies doing the heavy lifting.

“‘Doing less evil’ sustainable funds did a great job of tracking overall returns, despite horrible things like weapons manufacturers and for-profit prisons getting a bump from Trump’s win late in the year,” says Tim Nash, the founder of Good Investing, in an email. “Fortunately, Nvidia – one of the best-performing stocks in the entire market – has a strong sustainability rating and filled the gap nicely in sustainable funds that exclude less savoury tech companies like Amazon and Meta.”

Along with Nvidia, other common tech holdings for sustainable equity funds include Apple, Tesla, Alphabet and Microsoft.

The energy sector didn’t do any favours for sustainable investors in 2024, however. “Energy stocks lagged in 2024, which benefited investors who have divested from fossil fuels. However, green energy stocks had another abysmal year, so green investors can’t be too smug,” Nash says. “Niche clean-energy ETFs were some of the worst-performing ETFs in the market.”

The challenge of comparing funds with different sustainability metrics

To implement their strategies, ETF and mutual fund managers rely on widely varying data providers with their own divergent methodologies for rating companies. The lack of a standard taxonomy for sustainable finance makes these funds uniquely hard to compare, because there are so many different approaches for deciding what stocks they should contain. For example, Corporate Knights researchers give Nvidia a low sustainability score, while others, such as the ESG rating tool by the firm MSCI, put it higher. You can read a detailed explanation of the Corporate Knights methodology here.

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“Our taxonomy is different from others,” says Michael Yow, director of ratings at Corporate Knights. Yow’s research team takes a mostly quantitative approach, whereas other research providers use more qualitative definitions, so subjectivity can get into the investment, he says.

“We do this ranking to help investors cut through the noise and identify which funds stand above the rest when it comes to responsible investing,” says Toby Heaps, CEO of Corporate Knights, in a statement. “Our methodology meets the acid test of credibility, with 100% transparent and clear criteria for grading funds against peers according to the weighted sustainability score of their holdings.”

Here are each of the top sustainable ETFs in the four key categories used in the 2025 Responsible Funds ranking. Whether you’re looking for Canadian, U.S., international or global equity funds, these four achieved the highest sustainability level, according to the methodology used by Corporate Knights researchers.

This information is not financial advice. Speak with a professional advisor for financial planning.

* as at January 31, 2025

Top U.S. equity fund: Invesco ESG NASDAQ 100 Index ETF

This fund by Invesco Canada is an RRSP-eligible ETF (ticker: QQCE) that tracks the Nasdaq-100 ESG Index and reported an impressive 32.89% one-year return on January 31, 2025. For these higher returns, investors must be comfortable with higher risk of volatility. If you were to invest $100 in this ETF, you would pay a modest 22 cents toward management expenses.

QQCE was launched on November 15, 2021, and despite its relative youth, it has caught on with investors and already has $309 million (all amounts in Canadian dollars unless otherwise noted) in assets under management. Its top holdings are Microsoft, Apple and Nvidia. Apple ranks 69th on the Corporate Knights Global 100 ranking of the world’s must sustainable corporations. Two other G100 companies are among QQCE’s chief holdings: Tesla (#45) and Cisco (#54).

Top Canadian equity fund: RBC Vision QUBE FFF LV Canadian Equity Fd A

QUBE is an actively managed mutual fund for fossil-free investing. It uses an exclusion list based on the Carbon Underground 200 and another created with Sustainalytics. RBC Global Asset Management advertises this Canadian equity fund as a long-term investment with low-to-medium risk.

Created in 2021, this fund is weighted toward lower-risk stocks and sectors in the S&P/TSX Capped Composite Index. For example, as of December 31, 2024, the fund held 30% in financials, a lower-risk sector, and 0% in energy, a higher-risk sector.

This is an actively managed mutual fund, and for retail investors buying the Series A version, the cost to own is $1.89 per $100 invested, with a minimum investment of $500. QUBE has $188 million in assets under management, signifying ample liquidity. Its reported one-year return on January 31, 2025, was 21%, compared to 19.89% for the S&P/TSX Capped Composite Index.

Top international equity fund: Franklin ClearBridge Sust Intl Gth Fd Ser A

This is a sustainability-focused mutual fund that invests in equities issued outside the United States or Canada, and is also available as an ETF. This fund excludes fossil fuel companies and relies on ClearBridge’s proprietary ESG ratings. The managers take a “fundamental, bottom-up approach,” actively picking stocks according to their own best analysis and keeping most of their holdings in large companies. It has a medium risk rating and $314 million in assets under management.

The expenses for this actively managed mutual fund are slightly above average at 2.1%, or $2.10 for every $100 invested. Its one-year return as of December 31, 2024, was 15.12%, tracking closely with its benchmark, the MSCI EAFE Index.

“Many international stocks can be mispriced by markets, especially in the short term,” the firm wrote in a recent fund snapshot. “Active managers like ClearBridge can exploit these opportunities.”

This fund’s number one holding is SAP Software Solutions (G100 #58), a German cloud services provider with strengths in AI, whose one-year return at the time of writing was 58%, climbing from US$175.73 to $279.79. Following that is Novo Nordisk (G100 #62), a Dutch pharmaceutical giant, whose value has dropped precipitously since last summer. Schneider Electric, the first-place company on this year’s G100 ranking, is also among the fund’s top holdings.

Top global equity fund: CI MSCI World ESG Impact Index ETF

This medium-volatility ETF excludes fossil fuel companies and is available in two series, one in which exposure to foreign currency is hedged (CESG) and one that is unhedged (CESG.B), as well as a mutual fund version. It is advertised to investors who want to put their money into companies with strong environmental, social and governance (ESG) performance and “that have a positive impact on the environment and society.”

“Unlike many other ESG funds, which often hold very similar stocks to the broad market index and then apply a slight ESG tilt, CESG.B/CESG strictly screens for stocks that must meet several key impact metrics in order to be included in the fund,” a representative of CI Investments said in an email.

The total cost to invest in this low-carbon ETF is listed as 0.47% of its value, or $0.47 for every $100 invested. Created on September 12, 2019, and managed by CI Global Asset Management, this fund tracks the MSCI World ESG Select Impact ex Fossil Fuels Index. Its listed one-year return on January 31, 2025, was 0.3%, whereas its three- and five-year returns were both around 8%.

It has 72 listed holdings and its total assets under management are $61.2 million. Its current top holding is French IT company Dassault Systèmes, ranked 31 on the 2025 Global 100 list. Other G100 holdings include Ozempic-maker Novo Nordisk (#62) and the U.S. data processor and hosting provider Equinix (#72).

The post Meet the four most sustainable funds on the market for 2025 appeared first on Corporate Knights.

These events are becoming more frequent and more extreme, highlighting the pressing need for individuals and corporations to find solutions to deal with the far-reaching impacts of climate change.

In this time of need, the importance of purpose-driven companies, and the Impact Investing ecosystem that enables them to meet the evolving needs of communities and the planet, is evident. It’s why the TELUS Pollinator Fund for Good was created. Launched in 2020 as an extension of TELUS’ global leadership in sustainability and social capitalism, our Pollinator Fund seeks to enable purpose-driven companies with environmental and social solutions to scale up operations and put their ideas into practice, whether by turning waste into useful materials using mushrooms, securing the world’s pollinated food supply with precision beekeeping technology or accelerating reforestation after wildfires using drones.

With an initial commitment of $100 million, we have already invested nearly $40 million into 26 portfolio companies in just two years, as announced in our recently released 2022 Impact Report.

“The Pollinator Fund invests into early-stage, for‐profit companies where impact is baked into the business model. We support tenacious, mission-driven and diverse founders by leveraging TELUS’ broad network”

-Blair  Miller, Managing Partner, TELUS Pollinator Fund

Farming among fruit, nut and timber trees

Our Pollinator Fund harbors an unwavering commitment to encouraging the adoption of low-carbon and zero-waste solutions by investing in some of the most innovative, mission-driven startups. Drawing inspiration from nature’s ability to regenerate, it also actively invests in the creation of circular economy solutions and in sustainable food technologies.

Notable investments include Propagate which offers solutions for regenerative land management practices, promoting soil health, biodiversity, and crop yields through agroforestry.

It all started when Ethan Steinberg, Jeremy Kaufmand and Harry Greene decided to improve the agricultural landscape after recognizing a disconnect between the demand for healthy foods and the lack of accessibility of sustainable farming practices.

CEO and co-founder of Propagate, Steinberg and his team help farmers transition acreage to agroforestry. Concretely, this means integrating fruit, nut and timber trees with animal or crop farming systems. Propagate has planted 140,000 trees to date. Focusing on permanent crops in regenerative agriculture increases soil health and food quality and helps create a more robust food system with farms becoming more resilient to environmental issues.

Agroforestry makes farms resilient to climate change and sequesters more carbon. It also boosts profitability, and the trees create new and diversified income streams for farmers.

– Ethan Steinberg, CEO and co-founder of Propagate

With their solutions, Propagate helps farmers decide which trees to plant and where to plant them. Importantly, they also help farmers secure funding as trees take longer to reach maturity and yield financial benefits. Through our investment in Propagate, we want to help scale agroforestry across millions of acres, and farmers are already seeing notable changes including reduced soil erosion, improved growth of beneficial microbes and fungi and increased biodiversity. Farmers are more efficient and use less resources reducing the carbon footprint.

The time to scale up is now. With TELUS support, we’re confident that we can transform millions of acres of farmland and make them more resilient, environmentally friendly and profitable. 

– Ethan Steinberg, CEO and co-founder of Propagate

Measuring the impact of trees, drones and mushrooms

The Pollinator Fund also invested in Flash Forest, a Canadian reforestation company leveraging drone-based technology to regenerate post-wildfire areas when they are deemed too unsafe to have individuals plant trees by hand. Given that 2023 is on track for one of the worst years for wildfires on record, the need for efficient reforestation practices is more pressing than ever.

Also included in our 2022 impact report is Mycocycle, a natural solution that trains mushrooms to digest waste at a commercial scale and has diverted 15 tons of CO2e or 30,000 pounds of waste through their front-end treatment process. Through our investment, we are helping Mycocycle scale their operations and capabilities so they can process a wider range of waste materials.

With all these powerful impacts achieved by startups, there is an increased demand from companies like Propagate, Flash Forest and Mycocycle to quantify, measure and communicate their concrete outcomes in a meaningful way.

Startups often grapple with understanding how to best measure and communicate their contributions to reducing carbon emissions and other important social or environmental impacts. They don’t always know how to leverage the impact they create into an advantage when meeting with potential investors.

That’s why we have publicly released the Pollinator Impact Navigation Tool, a proprietary open source tool, to help demystify impact management for early-stage startups, share best practices expansion and amplify their impact.

Mycocycle, Flash Forest and Propagate exemplifies the best practices of integrating impact measurement and management into their business model, where business growth aligns with environmental metrics. As an example, Propagate recognizes the equal importance of reporting the level of carbon sequestered or number of trees planted alongside their traditional financial numbers.

For the Pollinator Fund and Propagate, cultivating a viable business means ensuring that revenue generation and impact go hand in hand, ultimately fostering a sustainable future, one tree and one farm at a time.

 ***

The TELUS Pollinator Fund for Good is one of the world’s largest corporate social impact funds, and focuses its investments on for-profit companies and founders committed to driving social innovation. While the Pollinator Fund is still early in its journey, it remains steadfast in its commitment to ethical and sustainable impact investing. To date, it has invested nearly $40 million of its initial $100M investment commitment and is generating promising early results with its portfolio companies realizing 155% revenue growth. This is a clear testament of the startups and Pollinator Fund’s ability to deliver financial returns while generating significant and measurable impact for our planet and the people in greatest need.

Mission-driven startups and partners looking for impact investments can contact TELUS here to learn more.

The post Building a more sustainable future — one bee, one farm, one forest at a time appeared first on Corporate Knights.