The COVID-19 pandemic and emerging geopolitical risks have underscored the intersections of health, governance, the economy and the environment. The importance of sustainability and resiliency have never been more vivid.

Tackling today’s challenges requires foundational shifts in perspective, including for group retirement plans.

ESG factors represent a seismic shift in how capital is allocated and has accelerated the response to societal challenges. Projections suggest that Environmental, Social and Governance (“ESG”) based investments could grow to $53 trillion by 2025, or a third of all assets under management.1

It’s what investors, Clients and employees are seeking. A 2021 study found that 71% of Clients are very or somewhat interested in learning more about sustainable investing through their investment provider.2

This playbook offers insights and actions you can take, no matter where your organization is on the sustainability journey. We’ll explore how having a sustainability strategy can improve outcomes relating to your plan, people, profits and the planet – and how Sun Life can help.

The sustainability advantage

Over time, a sustainable business model creates value for stakeholders without depleting the natural, economic, and social capital it relies on. 

Especially in volatile times, sustainability offers a future-proof strategy that’s good for business: 

  • Improved financial performance due to ESG becomes more marked over a longer time horizon. A proxy model aggregating 1,000 studies suggests that with all else being constant, a long-term ESG focus is 76% more likely to find a positive or neutral result.3
  • It improves employee attraction and retention for those seeking to an employer whose values are aligned with their own. 80% of millennials say they want to work for socially responsible companies.4
  • It improves brand perception and loyalty and attracts customers hoping to make a difference by voting with their wallets. 56% of consumers would pay more for a sustainable product.5

There is growing recognition that ESG factors are key drivers of value. Integrating these factors does not mean sacrificing returns. On the contrary, corporate profits and investment returns can actually be enhanced by adopting ESG principles. The MSCI Canada ESG Leaders Index outperformed the MSCI Canada Index in 11 of the past 14 years.6 According to Morningstar, Canadian Responsible Investment funds on average outperformed the returns in their respective asset class over a 3-year, 5- year and 10-year period.7

These factors have led 81% of institutional investors in Canada to employ ESG principles in their investment strategy.8 There are also indications that access to sustainable investment options can improve plan participation and overall retirement outcomes.

We found that 55% of Clients are likely to contribute more if their plan offered sustainable investing options.9

Approaches to sustainable investing

Here is a summary of the primary approaches to sustainable investing:


Embedding ESG data with traditional financial analysis of a company. This is the most common sustainable investing approach in Canada, and the approach Sun Life primarily utilizes.


Exclude specific companies, industries or sectors based on personal values, ethical considerations, or negative ESG characteristics. Examples include: Socially Responsible (SRI) or Fossil Fuel Free fund.


Focuses investing in specific areas, such as renewable energy, waste and water management, sustainable forestry and agriculture.


  • Many people associate sustainable investing with the divestment of fossil fuels.
  • We don’t believe this is the optimal approach. These companies are critical to the Canadian economy, and provide livelihoods to millions of people.
  • We support encouraging these companies to transform their business models to align to a more climate-friendly world.
  • Ultimately, we believe that engagement is more powerful than divestment.

Group Retirement Services and sustainability

Within Group Retirement Services, these pillars encompass a range of products, services and innovations. You may already be familiar with many of these:

GRS Driving sustainable outcomes

Sustainable investing

  • Proprietary ESG evaluation framework
  • Sponsor Review of ESG policies & investments
  • Thought Leadership, Insights & Advocacy
  • Member experience and education

Financial security

  • Planalytics & Data Insights
  • Retirement Readiness
  • Decumulation Solutions
  • Digital Partnerships
  • Retirement Planning Tools & Advice

Healthier lives

  • myWellness Rewards
  • Wellness Bundle (includes Lumino Health Virtual Care)
  • Lumino Health
  • Mental Health Strategy

These pillars build on our foundation as a Trusted & Responsible Business:

  • Diversity & Inclusion Commitments
  • Paper to digital conversion
  • Reduction in carbon emissions
  • Privacy & cybersecurity principles

Sponsor support

  • Conducting proactive conversations with plan sponsors to help them align their corporate sustainable strategy with their workplace savings plans.
  • Making it easy for sponsors to understand the current level of ESG integration in their plans.
  • Learn more about our Member experience and education efforts.

Influencing practices of investment managers

As part of our ongoing governance activities, we evaluate and engage with investment managers on the following:
  • Firm policies (what do they believe in?) This includes ESG resources, reporting, diversity and inclusion practices, and continuous improvement efforts.
  • Investment process (how do they integrate ESG?) This includes qualitative and quantitative factors.
  • Active ownership (what do they do as investors?) This includes active ownership policy (engagement and proxy voting).
  • 50% of our core platform investment managers are signatories of the Net Zero Asset Managers initiative, committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner. The 12 managers represent 78% of our platform assets.

Sun Life's advocacy efforts

  • GRS is one of the participants on a Canadian Association of Pension Supervisory Authorities (CAPSA) working group. The working group is developing a principles-based guideline for the integration of ESG factors in pension fund investment and risk management. 
  • GRS also participates in an Association of Canadian Pension Management (ACPM) ESG group. The group will issue a paper to help Canadian pension plan administrators understand their fiduciary duties relating to ESG and how to implement a sustainable investing strategy.
  • Sun Life is a participating organization on the Sustainable Finance Action Council, launched by the Government of Canada in 2021. The council brings together public and private sector financial expertise to support the growth of a strong sustainable finance market.
  • We’re engaging with the Department of Finance on proposals to integrate ESG factors in plan governance within federally regulated pension plans.
  • We’re also consulting with regulators including The Office of the Superintendent of Financial Institutions (OSFI), to offer input on recommendations for sustainable investment principles.

A closer look at our proprietary ESG evaluation framework

Sun Life Group Retirement Services is proud to offer a proprietary ESG evaluation framework. This robust framework is an extension of our ongoing investment governance activities. It identifies managers and funds who we believe are ESG Leaders. It also recognizes those who are evolving quickly.

A recent Sun Life survey found that 23% of Clients who purchased investments considered ESG factors.10 Among younger Clients aged 18-34, this increases to 38%.11 The framework has already classified many funds you may offer within your workplace plan as ESG Leader funds. These funds have proven to be popular choices among plan members, as seen in the summary below. Seventy-eight percent of Clients are interested in seeing more sustainable investments offered.12 

Plan Sponsors13

  • 81% of Canadian institutional investors – including Plan Sponsors- use ESG principles as part of their investment approach and decision-making.
  • 41% believe ESG portfolios are likely to outperform non-ESG investments.
  • 80% believe integrating ESG factors can help address risk.

Investment Solutions & Funds

  • 100% of our Core platform investment managers are PRI signatories.
  • ESG Leader Funds make up 57% of assets.
  • Sustainable investing options generally do not have higher investment management fees relative to traditional investment options.

In addition to the framework, Sun Life can offer the following support to plan sponsors:

  • Understanding the various approaches to sustainable investing.
  • Adopting a formal policy on your desired approach and helping document your selection of investment options for plan members.
  • Supporting the evaluation of your investment managers' efforts in ESG integration or dedicated sustainable investment products.

For plan members, we’ll integrate elements of the new ESG evaluation framework into each step of their journey. 

Member experience and education

Sun Life sustainable investing educational campaigns help members understand what ESG is and how managers generally integrate ESG factors into their investment process. This online campaign includes a new site, including three educational videos, articles and industry research. 

Sustainable Investing

How your group plan makes a difference

Watch the member education videos

Morningstar fund fact sheet updates

We include information on our Morningstar fund pages about how fund on our core investment platform integrates ESG into their investment process. This information can help plan members make more informed investment decisions.

Ella Pop-up messages

Ella, Sun Life’s AI assistant, provides prompts for investors to learn more about sustainable investments.

The majority of Canadians participating in their group retirement and savings plans are interested in seeing more sustainable investments offered to them.14

A 2021 Sun Life survey on ESG investing revealed key findings that informs our approach to member education.

  • 71% are interested in learning more about sustainable investing from their provider
  • 80% overall – and 88% of millennials – care about strong returns when investing sustainably
  • 55% are likely/ somewhat likely to change their current contributions to sustainable investments
  • 38% are willing to increase their current contribution level, if put towards sustainable investments
  • 32% didn’t consider ESG factors because they didn’t know or weren’t aware they were offered
  • The most important ESG factors: Human rights (42%), Strength of management (39%), Protecting the environment (39%), Fraud or corruption (38%)

As well, the content-rich Sustainable Investing page of the Member Resource Centre provides helps plan members better understand how their group plan makes a difference—by offering, at the very least, access to investment options which consider ESG factors. Research suggests that this awareness can be a powerful way to engage members leading to better outcomes in their plans.15

Education on sustainable investing principles, coupled with details of how each fund considers ESG factors, help plan members make informed decisions when it comes to sustainable investing.

What can you do next?

Leverage Sun Life’s expertise to help you define the sustainability opportunity for your organization

  • What commitments do you make in your sustainability report & how can we help?
  • Understand the three sustainable investing approaches and select which is best for you
  • Adopt a formal sustainable investment policy & document your approach
  • If you offer custom off-platform funds, work with us to add “How this fund integrates ESG” info on fund sheets, to help members make informed decisions
  • Stay tuned for further guidance on ESG (CAPSA, ACPM) coming soon
  • Lean on Sun Life for:
  • ESG evaluation of your managers/plans, and/or
  • To assist with selection of Sustainability Focused options

How you can start to build a sustainability strategy for your business

You may think your organization is too small – or too big – to put an effective sustainability strategy in place. Or, that this is simply not a good time to embark on a sustainability journey.

Companies may find themselves in different places on the sustainability continuum. While 60% of companies have a sustainability strategy, only 25% have developed a clear business case for their sustainability efforts.16 You may be just starting out or looking to re-evaluate your strategy. At every stage, we’re here to lend our expertise on sustainability to help you evaluate and define the opportunity for your organization. 


  • Evaluate where you are on the journey
    As we’ve seen, you’re likely already employing sustainable practices within your business. Some areas may be more relevant than others, depending on the nature of your business.
  • Focus on what you know best
    These will typically be the areas of greatest impact. For example: a focus on mental health, diversity and equity, access to sustainable investments, green procurement or community relations. 


  • Identify key stakeholders
    Generally, investors, employees and customers are key, but there could be others, such as suppliers or the broader community. You can also work with government and within your industry to effect change.
  • Align corporate and HR strategies
    Aligning corporate and HR strategies can increase engagement, productivity and innovation. Embed sustainability in your culture, values, branding, corporate voice, and the causes important to your organization. 

Build on the opportunity

  • Mobilize senior leaders
    Creating partnerships and alliances with senior leaders can amplify and extend the impact of your program. It can help influence employees to get on board. It also fosters an emotional commitment to your strategy and values.
  • Define and measure Key Performance Indicators (KPIs), re-evaluate
    Develop and deliver a sustainability program that includes prioritized initiatives, milestones, KPIs and measurable targets. Monitor, track progress and re-evaluate, if needed.

Sun Life's commitment

At Sun Life, our Purpose is to help our Clients achieve lifetime financial security and live healthier lives. Our approach to sustainability directly aligns to our business priorities and brings our Purpose to life. Our corporate sustainability plan is focused on our greatest opportunities to have a positive impact on society, while creating competitive advantage for our business:

  • Increasing financial security, including providing sustainable retirement income,
  • Fostering healthier lives, and
  • Advancing sustainable investing.
  • Sun Life’s goal to achieve net-zero greenhouse gas (GHG) emissions by 2050 for both investments and operations.

Sun Life Sustainability Report – 2021 Performance

How we performed in 2021, including our actions to build a more sustainable future

Download the report

View all ESG data & resources

Key priorities and targets under our corporate plan include:

Increasing the rigor of ESG integration into our investment processes and making sustainable investments. $20B of new investments in sustainable assets and businesses from 2021-2025.
Minimizing our environmental footprint and ensuring we are resilient against climate change risks. 30% greenhouse gas reduction by 2030 in corporate and investment real estate portfolios. Carbon neutral operations from 2021.
Promoting greater diversity, equity & inclusion. 50% women in Vice-President (VP)+ roles globally and 25% underrepresented ethnicities in VP+ roles in North America by 2025.

"Climate change is the defining issue of our lifetime. Our Purpose of helping our Clients achieve lifetime financial security and live healthier lives cannot be achieved without serious action to address climate change and support a transition to a lower-carbon future. That is why we're committed to integrating climate strategies across our investment businesses and working collaboratively with our Clients, stakeholders, and the industry at large, towards this common goal."

Kevin Strain, President and CEO of Sun Life

Net Zero Goal

Sun Life’s goal is to achieve net-zero greenhouse gas emissions by 2050 for both investments and operations with interim targets to be announced in 2022.

Learn more about our Net Zero goal.


Bloomberg Intelligence. ESG assets may hit $53 trillion by 2025, a third of global AUM, February 23, 2021.

2 Sun Life Global Client Experience and Insights, Global Marketing. Sun Life Bright Minds survey of 403 respondents, April 13-April 20, 2021.

3 ESG and Financial Performance: Uncovering the Relationship by Aggregating Evidence from 1,000 Plus Studies Published between 2015 – 2020. NYU Stern Centre for Sustainable Business and Rockefeller Asset Management, February 2021.

4 Murray, A. America’s CEOs Seek a New Purpose for the Corporation. Fortune Magazine, August 2019.

5 CGS 2020 Retail and Fashion Sustainability Survey. CGS, July 2020.

6 MSCI Canada ESG Leaders Index vs MSCI Canada Index. Cumulative Index Performance, Gross Returns, 2008 –2021.

7 RIA. Quarterly Responsible Investment Funds Report, March 31, 2021.

8 2021 Responsible Investing Survey. RBC Global Asset Management, October 2021.

9 Sun Life survey, April 2021.

10 Canadian Market Research Study. Sun Life, January 2021.

11 Sustainability & Importance of ESG Investing. Sun Life, April 2021.

12 Sun Life, 2021.

13  2021 Responsible Investing Survey, Canadian Results. RBC Global Asset Management, October 2021.

14 Sun Life Canadian Market Research Study, April 2021.

15 MFS, Top Things You Should Be Thinking About in DC, July 2020. (Over 4,000 plan members globally, including over 1,000 Canadians)

16 Sustainability at a Crossroads: Progress Toward Our Common Future in Uncertain Times. MIT Sloan Management Review in collaboration with the Boston Consulting Group, May 2017.