The concept behind “fiduciary duty” is shifting from a legal term to an investment-related one, said Michael Jantzi, CEO of Amsterdam-based Sustainalytics, in his keynote speech at the Responsible Investment Association conference held in Toronto on Monday.

In most jurisdictions, the concept of fiduciary duty will continue to evolve. “Fiduciary is not a static construct,” he said.

For example, Jantzi said, it wasn’t many years ago that a fiduciary duty was considered the biggest obstacle to responsible investing, which considered environmental, social and governance (ESG) factors, because it seemed in conflict with the responsibility of protecting the bottom line.

“When I think about impact investing, it highlights a continuing evolution of fiduciary duty,” Jantzi said. “Over the last 10 to 12 years, we have focused our attention on the [ESG] issues Canada will have on our portfolio. I believe that over the next 10, 12 or 15 years the conversation will shift into talking about the impact our portfolios have on the environment and on the social fabric in the communities in which we live and work.”

Investment managers in the Netherlands, Scandinavia, Australia and Japan have a more progressive approach to this duty, as they have a responsibility to think about the future and the world into which their pension plan members will retire. Their responsibility is to ensure clients “can drink the water, breathe the air, and have strong access to social institutions,” Jantzi said.

However, Jantzi noted, in Canada this idea of fiduciary duty has not advanced as far. But he does see it as remaining on the table.

What Jantzi is seeing more of in Canada is the understanding that the investment industry is a steward of other people’s capital. And that means a longer-term investment focus, which requires looking at sustainability issues, which includes engaging by proxy voting.

Jantzi cautioned against getting discouraged by the slow pace at which the retail investment space is moving in this direction. The baby boomers still hold the majority of the wealth and aren’t as interested in ESG investing as millennials are.

It’s likely going to take a decade before the investment industry sees major growth in this area, particularly once the millennials receive their impending large wealth transfer. As studies show, 75% of those aged 35 and under are very interested in responsible investing.