Responsible investment: Going beyond financial results

According to a recent SOM1 survey conducted on behalf of Desjardins, 71% of Quebec respondents interested in responsible investment (RI) say they are motivated by the positive impacts it has on society and the planet.

Responsible investment incorporates environmental, social and governance (ESG) criteria into the selection and management of investments. At Desjardins, we use a number of strategies to incorporate ESG criteria, in addition to rigorous financial analysis.

The financial returns of portfolios and mutual funds are regularly communicated to holders. In this article, we will look at both financial and extra-financial returns.

A worldwide movement

In September 2015, the United Nations launched its This link will open in a new tab. 17 Sustainable Development Goals (SDGs) to be achieved as part of the Sustainable Development Agenda by 2030. The goals include gender equality, support for affordable clean energy and universal access to quality education. These goals “address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice.2” The impact of RI can be difficult to quantify, but assessing it remains a priority for Desjardins so as to demonstrate to investors the positive spinoffs of the activities of issuers for social and environmental issues.

Tangible and inspiring impacts

For example, the This link will open in a new tab. Desjardins SocieTerra Positive Change Fund uses the framework of the UN’s SDGs to evaluate the impact of its investments. The Fund invests in a company that provides distance higher education to over 900,000 Brazilians with a monthly household income of under US$1,000. Through these courses, students learn math, reading and writing, in addition to acquiring professional skills. It has been shown that, four years after they had completed their educational program, the students' average income was 81% higher. This is an excellent result compared to the average of 55% reported by the Organisation for Economic Co operation and Development (OECD). In this way, the Desjardins SocieTerra Positive Change Fund makes a key contribution toward achieving two of the UN’s goals: universal access to quality education as well as decent work and economic growth.

Of course, it’s important to choose investments that are in line with your investor profile, taking into account your investment horizon and risk tolerance. However, at the same time, you can choose to support companies that promote sustainable development while respecting people and communities.

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The author

Denis  Dion

Denis Dion

CFA, SIPC Product Manager
Denis Dion is a Responsible Investment product manager at Desjardins Group. In this capacity, he is responsible for the evolution of the responsible investment products and monitors financial and extra-financial performances. Denis has been working in the field of financial services for more than 30 years and has been a product manager for 12 years.