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5 great reasons to choose responsible investment

March 27, 2024

Thinking of jumping on the responsible investment bandwagon, but don't have the information you need? Here are 5 great 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!

This type of investment offers attractive potential returns while allowing you to use your savings to drive real change. How? By giving you the opportunity to support companies with 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 picking process that includes an evaluation of companies' environmental, social and governance practices, also known as ESG criteria.

For each of these criteria, we analyze how companies behave in relation to various issues, as illustrated by the examples below.

Is the company taking appropriate action on biodiversity, climate change and water management?

Does it respect human and workers' rights?

Does it take acceptable positions on board diversity and executive compensation?

Marie-Justine Labelle is head of Responsible Investment and Governance at Desjardins. " We look at how companies perform and behave in terms of ESG and invest in those that have the best record and implement policies to maintain that momentum," she says. "The way 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 automatically excluded from the range of eligible stocks under Desjardins's responsible investment standards. These include companies in the tobacco, nuclear energy and firearms1 industries and fossil fuel producers and transporters.

3. You’re helping influence corporate practices

Responsible investment has spillover effects on people and companies. The more investors choose responsible investment solutions, the more companies will commit to responsible business practices.

In the process, they gain the tools they need to deal with change. This makes them stronger, more resilient and better able to meet the challenges of today's markets.

4. You’re helping drive change and make things happen

Shareholder engagement is a true driver of change—and one of the most important parts of responsible investment.

According to Marie-Justine Labelle, shareholder engagement has a positive impact on current and future generations. "Voting at shareholder meetings and engaging in dialogue with companies to encourage them to adopt better practices helps deliver benefits for a better 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

Desjardins SocieTerra® Funds and Portfolios managers are engaging in conversation about responsible investment with companies, and it's 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 setting up programs to improve female representation on boards of directors.

5. Your investments can be both responsible and profitable over the long term

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—at least not over the long term.

Marie-Justine Labelle points to the findings of a review of more than 1,000 studies published between 2015 and 2020: "In the majority of cases, the return on RI funds was greater than or equal to the return on traditional funds. Choosing RI doesn't mean compromising on long-term performance.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 shape a better world, today and tomorrow.

Desjardins is here for you

Our advisors are always available to answer your questions and help you make investment decisions. For more information or to start investing in RI products, contact us online or by phone.

1. Automatic or semi-automatic weapons for civilian use.

2. Tensie Whelan, Ulrich Atz, Tracy Van Holt and Casey Clark, CFA (2021). ESG and financial performance: Uncovering the Relationship by Aggregating Evidence from 1,000 Plus Studies Published between 2015–2020. New York University & Rockefeller Asset Management, 2021.

Desjardins®, trademarks containing the word Desjardins, and their related logos, as well as the SocieTerra® brand, are trademarks of the Fédération des caisses Desjardins du Québec, used under licence.

Desjardins Funds are not guaranteed, their value fluctuates frequently and their past performance is not indicative of their future returns. The indicated rates of return are the historical annual compounded total returns as at the date of this document including changes in securities value and reinvestment of all distributions and do not consider sales, redemption, distribution or other optional charges, or income taxes payable by any security holder that would have reduced returns. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Desjardins Funds are offered by registered dealers.