Would you like to invest your money in companies that are making a positive impact on people and the planet? ESG investing is for you. The letters ESG refer to the three types of criteria that are taken into account when choosing a sustainable investment strategy: environmental (E), social (S) and governance (G) factors. Not only does this type of investment provide diversification, but it also allows for responsible investing. Explore our three-part series on the three factors.
In this article, we will take a closer look at environmental (E) factors. When we talk about environmental factors, we think, for example, of biodiversity, CO2 emissions, or the management of natural resources. So, before potential conscientious investors invest in a company, they will check, for example, whether the company produces sustainability reports, how it manages energy or treats animals, to what extent it limits the use of chemicals or pollutants, whether it seeks to reduce its greenhouse gas emissions or whether it uses renewable energy sources.
Companies that are integrating environmental factors may have activities that are looking to:1
Investment fund managers will also consider whether environmental factors may impact a company’s profitability in the future. Because, ideally, the goal is to choose investments that have higher return potential or lower risk based on ESG factors. Is the company located on contaminated land? Does its operation meet government environmental standards? These are all things to consider when looking at an investment that represents our values while having a measurable positive impact on the environment.
The environmental factor tends to be the most popular because a growing number of people are sensitive to climate issues, which are considered the greatest threat to global security.2
Interest in sustainable investment is not a fad. Interest is growing. The proof? 51% of all professionally managed assets in Canada in 2020 used a sustainable investment strategy. And, according to one survey, 75% of Canadian investors want to learn more about sustainable investing.6
There is ample evidence that companies that implement sustainability initiatives tend to have better financial performance than those that do not. The potential for returns and growth from ESG products is, therefore, very attractive, as these statistics demonstrate: 7,a
At Laurentian Bank, we take ESG factors into account by offering a complete range of fundsb distributed by LBCFS, in partnership with Mackenzie Investments, such as:
As we have seen, investing according to your values is possible and accessible. We are here to advise and guide you so that you can make the best choices based on what you value. Do not hesitate to consult one of our advisors, who will help you make informed choices to become a responsible investor.
Laurentian Bank: Laurentian Bank of Canada.
LBCFS: LBC Financial Services Inc.
The mutual funds (Funds) are distributed by LBC Financial Services Inc. ("LBCFS"), a subsidiary of Laurentian Bank of Canada ("Laurentian Bank"). The funds offered by LBCFS are part of the Laurentian Bank Group of Funds managed by Mackenzie Investments. LBCSF is a legal entity distinct from Laurentian Bank and Mackenzie Investments. The licensed LBCFS Mutual Fund Representative is also an employee of Laurentian Bank. As such, LBCSF's liability is limited to the actions of its representatives in the course of their duties to LBCFS. The Fund Facts and Simplified Prospectus contain important information. We ask that you read these documents carefully before investing. Fund Facts can be obtained by contacting an LBCFS representative at any Laurentian Bank branch.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in a fund. Nothing guarantees that the fund will maintain its net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. Mutual fund values change frequently, and past performance may not be repeated. This article is provided for informational purposes only and its contents should not be construed, considered or used in any way as financial, legal, tax or other advice. It does not create any legal or contractual obligation for LBC Financial Services, Inc. ("LBCFS"), Laurentian Bank or their affiliates. They shall not be liable for any damages or losses that may arise from any errors or omissions in the information or from any actions or decisions taken in reliance on such information. Please consult your advisor or other independent professional for advice based on your situation and needs.
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