5 great reasons to choose responsible investment
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 could be right 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 combines financial analysis with an assessment of ESG criteria to better understand a company’s strategy, value, risk exposure and ability to seize business opportunities and create long-term value for its stakeholders (shareholders, employees, clients, community, etc.).
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?
More than just financial
With this mind, the Desjardins Sustainable Funds lineup excludes certain companies because of their activities. These include companies involved in the production of tobacco and vaping products, fossil fuel production and transportation, nuclear energy and firearms.1
At Desjardins, we believe that companies that value ESG issues are better equipped to manage risk and seize opportunities from a transitioning economy.
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
Stewardship is one of the most important aspects of responsible investment. For institutional investors, stewardship is about driving change by using their influence to maximize global long-term value, including the value of common social, environmental and economic assets that clients and beneficiaries depend on for interest returns.2 When you choose responsible investment, your money supports portfolio managers’ stewardship actions to promote the long-term value of investments while fostering sustainable benefits through improved environmental, social and corporate 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 diversity on boards of directors.
Using the levers of stewardship—such as voting at shareholder meetings, engaging in dialogue with companies, and encouraging them to adopt better practices—helps deliver benefits for a better today and tomorrow.
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. The reality is quite different over the long term, and there are some important considerations to take into account.
As with any investment product, short-term performance for responsible investments largely depends on economic conditions, the political climate and other factors. Some fluctuation is normal. The exclusion of certain controversial sectors from responsible investment funds could contribute to performance gaps—which could be positive or negative, depending on the context—compared to traditional funds.
However, when looking at long-term performance, most studies find that there is no trade-off between responsible investment returns and those of similar conventional investment products.3 Responsible investment offers the opportunity to grow your money and support the transition to a more sustainable world.
Choosing RI means investing in future generations
By investing in companies selected for their financial strength and business model based on sustainable practices, 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. Contact us for more information or to start investing in responsible investment products.
To learn more about responsible investment:
1. Thresholds and exceptions may apply. For more details, see the Desjardins Funds Responsible Investment Policy.
2. About stewardship | PRI Web Page | PRI
3. 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.
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.