Yes, it is possible to make responsible investments (and it is simpler than you might think)

Investing is good, but putting your money in funds that contribute to a fairer and greener future is greener future, it's better. Welcome to the world of responsible investment!

Even though there is no official certification for responsible or sustainable investment or sustainable investment, it is normally referred to as investment choices that are made with are made by taking into account, yes, performance and return factors, but also ESG factors: environmental, social and governance. The idea here is to invest in green funds or in companies whose social or environmental mission is as important as social or environmental mission is as important as its profitability.

While all types of investments can incorporate ESG factors, banks and investment firms are now and investment firms now all offer dedicated sustainable investment options for investors for their clients' portfolios. In order to the picture, it is possible to divide these types of responsible investments into 3 broad categories.

Socially responsible investment

This type of investment consists of investing in funds or companies that adopt socially responsible operations, rooted in respect for human rights, diversity, inclusion, First Nations rights and oriented towards a limited environmental footprint.

While there is no national certification in Canada, like the SRI label in Europe, there are some indicators that can be relied upon when choosing a socially responsible investment. The first is to choose a certified fund from your financial institution. The second is to choose a company that has obtained a certification from a recognized organization, such as the B-Corp seal, which is the highest North American standard for socially responsible management.

Investing in green bonds

Issued by companies, but mostly by government agencies, to finance large-scale projects with low environmental impact. This type of investment has a direct effect on the development of infrastructure and the implementation of technologies that contribute to the fight against climate change.

In Quebec, the Société de Transport de Montréal and the Caisse de dépôt et placement have green bond programs that are attractive to investors. Ontario is the province that issues the most green bonds each year with $13 billion outstanding. Ontario is also using green bonds to finance massive investments in public transit, among other things.

Investment in clean technologies 

This type of investment aims to finance companies that develop solutions to reduce the environmental impacts of industry and economic activity. Some of these solutions aim to upgrade polluting infrastructures to meet new standards, while others innovate to get us out of our dependence on fossil fuels and accelerate the transition to a green economy.

In Toronto in 2022, NEI Investments launched its Clean Infrastructure Fund, the largest to date in Canada. The fund promotes a responsible investment strategy focused on the global transition to clean energy with the goal of achieving net zero emissions. In Quebec, the Idealist Climate Impact Fund was launched in September 2022 - a $250 million initiative - to support local companies in developing the green technologies of tomorrow.

The returns on these different investment options will vary according to risk, just as they do for so-called regular investments, but by choosing to invest with ESG factors in mind, it is possible to vary one's portfolio while supporting companies that are thinking today about tomorrow's world.

The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This blog was written, designed and produced by Pierre Dauth, Investment Funds Advisor with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this blog comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities.  Mutual Funds are offered through Investia Financial Services Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments.  Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.