2 Best ESG ETFs in Canada (June 2026)
The best ESG ETFs in Canada include XESG.TO (~0.20% MER), XCSR.TO (~0.20%), and ESG.TO (~0.20%). These funds apply environmental, social, and governance screening to global or Canadian equities, helping investors build diversified portfolios while aligning with sustainability and responsible investing goals.
ESG ETFs in Canada are designed for investors who want to align their portfolios with environmental, social, and governance (ESG) principles while still maintaining diversification and long-term growth potential.
ETFs like XESG.TO and XCSR.TO focus on companies that meet specific sustainability criteria, often excluding or reducing exposure to industries like fossil fuels, weapons, or tobacco.
In this guide, we break down the best ESG ETFs in Canada, comparing sustainability screening, diversification, and fees.
At a Glance: Quick Comparison
Side-by-side snapshot of fees, yield, and returns. Data updates daily.
| ETF | MER | AUM | Yield | YTD | 1Y |
|---|---|---|---|---|---|
Top XESG.TO iShares ESG Aware MSCI Canada Index ETF | — | $638M | 1.96% | +9.84% | +32.80% |
XCSR.TO iShares ESG Advanced MSCI Canada Index ETF | — | $502M | 1.63% | +8.74% | +35.12% |
What Is an ETF?
An ESG ETF in Canada is an exchange-traded fund that selects investments based on environmental, social, and governance criteria, aiming to balance responsible investing with long-term returns.
For example, XESG.TO (~0.20% MER) provides globally diversified ESG exposure across developed and emerging markets, while XCSR.TO (~0.20%) focuses on Canadian companies screened for sustainability factors. ESG.TO (~0.20%) offers another globally diversified ESG option with broad sector coverage.
These ETFs are commonly held in TFSAs, RRSPs, and long-term portfolios by investors who want both diversification and values-based investing.
The 2 Best ETFs: Ranked & Reviewed
Detailed breakdown of each pick with live data.
iShares ESG Aware MSCI Canada Index ETF
$42.53
+9.84% YTD
NA
Returns
YTD
+9.84%
1Y
+32.80%
3Y
+23.45%
5Y
+14.04%
iShares ESG Advanced MSCI Canada Index ETF
$111.02
+8.74% YTD
NA
Returns
YTD
+8.74%
1Y
+35.12%
3Y
+26.43%
5Y
+14.70%
Pros & Cons
Pros
- Aligns investments with environmental, social, and governance values
- Broad diversification with ESG screening applied
- Can reduce exposure to controversial industries
- Suitable for long-term, values-based investing
Cons
- ESG definitions and screening criteria vary between providers
- May exclude sectors that outperform at times (e.g., energy)
- Slightly higher MERs than basic index ETFs in some cases
- Performance can diverge from traditional benchmarks
Compare These ETFs Head-to-Head
Drill into a side-by-side breakdown of performance, AUM, and yield.
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Frequently Asked Questions
What is the best ESG ETF in Canada?
XESG.TO is one of the most popular ESG ETFs in Canada due to its global diversification and consistent ESG screening. XCSR.TO is a strong alternative for investors looking for Canadian-focused ESG exposure.
Do ESG ETFs perform as well as regular ETFs?
ESG ETFs can perform similarly to traditional ETFs over the long term, but results may vary depending on sector exclusions and market cycles. Performance differences often come from underweighting industries like energy or materials.
Are ESG ETFs truly sustainable?
ESG ETFs follow defined screening frameworks, but standards differ by provider. Some funds focus on exclusion, while others use best-in-class selection. Investors should review the methodology to ensure it aligns with their personal sustainability goals.