5 great reasons to choose responsible investment
Thinking of jumping on the responsible investment bandwagon, but don’t know enough about it? Here are 5 good reasons to choose responsible investment and help contribute to sustainable development and the well-being of communities.
1. Your investments will be aligned with your interests and priorities
Are you concerned about climate change, diversity, inclusion and executive compensation? Responsible investment is for you!
Besides offering attractive potential returns, responsible investments allow you to use your savings to drive real change. How? By giving you the opportunity to encourage companies that have environmentally and socially responsible practices that align with the issues you care about.
2. You’re supporting companies that promote sustainable development
Responsible investment uses traditional financial analysis, but what makes it different is the stock selection process that includes an evaluation of companies’ environmental, social and governance practices, also known as ESG criteria.
Every stock is evaluated on each of these criteria, as the following examples show.
Is the company taking appropriate action on biodiversity, climate change and water management?
Does it respect human and labour rights?
Does it take acceptable positions on board diversity and executive compensation?
As Marie-Justine Labelle, Responsible Investment Director at Desjardins, says, “We look at the ESG performance and practices of companies and invest in those that have the best record and implement policies to maintain that momentum. As we see it, the companies that are most effective at managing environmental risks and being socially responsible are in the best position to seize opportunities.”
Performance and much more!
More and more people are realizing that the pursuit of short-term returns shouldn’t come at the expense of the environment and community well-being. That’s why some companies are off limits from the start. That includes companies in the tobacco industry, fossil fuel producers and transporters, nuclear energy and civil arms.1
3. You’re helping influence corporate practices
Responsible investment has a ripple effect on people and companies. The more investors choose RI solutions, the more companies will commit to responsible business practices.
In the process, they become better able to deal with change. They become stronger, and more resilient and flexible, so they can better meet the challenges of our modern economy.
4. You’re helping drive change and make things happen
As a true driver of change, shareholder engagement is one of the most important parts of responsible investment.
As Marie-Justine Labelle says, “Shareholder engagement helps have a positive impact on current and future generations. By voting at shareholder meetings and engaging in dialogue with companies to encourage them to adopt better practices, we’re helping deliver benefits for the world of today and tomorrow.”
This engagement strategy allows portfolio managers to represent investors in interactions with companies to improve their environmental, social and governance practices.
Dialogue that pays off!
The discussions that Desjardins SocieTerra portfolio managers have with companies are making a difference:
- Companies are accelerating their energy transition by reducing their dependence on fossil fuels.
- Auto manufacturers are expanding their range of low-emission vehicles to reduce their greenhouse gas emissions.
- Companies in all sectors are implementing programs to increase the representation of women on boards of directors.
5. Your investments can be both responsible and profitable
More and more people are becoming aware of responsible investment and its many positive impacts. However, some believe that responsible investments offer lower returns than traditional investments. Nothing could be further from the truth.
According to Marie-Justine Labelle, “Choosing RI doesn’t mean compromising on long-term performance. In fact, an analysis of over 1,000 studies published from 2015 to 2020 showed that most of the time RI funds had equivalent or superior returns compared to traditional funds.”2
Choosing RI means investing in future generations
By investing in companies that focus on sustainable development, you’re making a significant contribution to the health of your family, your community, your country and the planet we all care about. At the same time, you’re helping to make the world a better place today—and tomorrow.
Desjardins is here for you
1. Automatic or semi-automatic weapons for civilian use.
2. Whelan, Tensie et al. ESG and financial performance: Uncovering the Relationship by Aggregating Evidence from 1,000 Plus Studies Published between 2015 - 2020., New York University & Rockfeller Asset Management, 2021.