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My advice • March 09, 2022
modified on June 06, 2024

Investment Series - ESG Investments: Investing Sustainably

What about the environment?

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.

Overview of the "E" factor

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

  • Protect biodiversity
  • Use clean energy
  • Mitigate climate change
  • Limit greenhouse gas emissions
  • Conserve water
  • Reduce pollution
  • Limit the amount of waste produced
  • Use natural resources while restoring them, if possible, to their original condition
  • Do not contribute to rising sea levels

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 urgency to act that drives investment

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

  • Global CO2 emissions have more than doubled since 19903
  • Depletion of water resources affects more than 40% of the world's population4
  • Three billion people lack access to clean fuels and cooking technologies5
  • Sustainable investment now exceeds $50 trillion worldwide6

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

Does the environment mean profitability?

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

52 of 69 Morningstar ESGscreened indexes outperformed their broad market equivalents in 2020. 57 of 65 Morningstar ESG indexes outperformed for the five years through the end of 2020. 59 of 65 ESG indexes lost less than their broad market equivalents during downside markets over the past five years. That includes the bear market in the first quarter of 2020.
Products to invest in, according to your values

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:

  • Mackenzie Greenchip Global Environmental All Cap Fund (E Focus)
  • Mackenzie Greenchip Global Environmental Balanced Fund (E Focus)
  • Mackenzie Global Sustainable Balanced Fund (Fund focused on sustainable and responsible issuersc)
  • Mackenzie Global Sustainable Bond Fund (Fund focused on sustainable and responsible issuersc)
  • Mackenzie Betterworld Canadian Equity Fund (E, S and G Focus)
  • Betterworld Global Equity Fund (E, S and G Focus)

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.


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