According to a survey from the United Nations, 64% of people said that COVID-19 made them aware of social issues that weren’t previously on their radar, while 79% of respondents see the pandemic recovery phase as an opportunity for governments to accelerate their progress to reach net-zero carbon emissions by 2050.

It’s also made your clients think more about how they’re investing and whether they can better align their savings with their values. “While some people unfortunately found themselves in a situation of financial insecurity, those who maintained job security weren’t spending their money and had time to think about their finances,” says Marie-Justine Labelle, Head of responsible investment for Desjardins Investments. “That was a point of reflection for investors, to see the link between the two.”

That could explain why, according to a recent survey out of the U.S., 31% of advisors reported an increase in the number of clients asking about responsible investing. The concern was mostly coming from younger clients, the average age of those bringing it up being under 40.

In Canada, three-quarters of investors say they are interested in responsible investing. But the same poll indicated that only 16% reported that their advisor brought up this topic with them. “It’s this hidden need,” Labelle says. “A key takeaway from surveys we conduct is that advisors taking the first step and having that discussion with their clients is really important.”

It’s why Desjardins Group has developed tools and support to help advisors have that initial conversation about the subject. In 2019, it launched the Responsible Investing Certification Program, which helps advisors learn more about responsible investing. It was created to answer key questions advisors have about responsible investing and to teach them about what strategies are most valuable for their clients’ portfolios and their own practices. It takes three-and-a-half hours to complete, and more than 1 400 advisors have been enrolled since the start of program.

Further, Desjardins has made it its mission to be the leader among Canadian financial institutions at providing education on sustainable investing.

More options ahead

As the world moves into its post-pandemic era, advisors will need to start offering their clients more responsible investment options. In doing that, companies may want to make it easier to identify funds and products that can help people invest more sustainably. Desjardins, for instance, uses the term SocieTerra on all of its funds that comply with the firm’s Responsible Investment Policy.

The company also offers 11 standalone responsible investing funds for advisors to choose from – both core ESG funds that provide exposures to certain asset classes, but also promote shareholder advocacy and integrate other RI strategies, and thematic products such as the Diversity Fund, Cleantech Fund and Positive Change Fund that make targeted investments in companies that aim to have a positive impact on the world.

By having a diverse product lineup, advisors can more easily create portfolios that align with their clients’ values and needs. “We aim to have the most complete shelf in the Canadian market, so that if there is a need among clients, we have the product to respond to it,” Labelle says.

ESG goes mainstream

With the push provided by the pandemic, taking ESG factors into account has become positively mainstream. According to the Responsible Investment Association of Canada, assets managed using at least one responsible investing strategy account for more than 60% of total assets under management in the country. Institutional investors and regulators are increasingly picking up on this. Labelle expects that within 10 years if not less, ESG scrutiny will be standard practice in the wealth management industry.

Another reason responsible investing will keep growing is that technology will continue to bring people closer to their investments and make them more aware of what’s in their portfolios. “It takes personal finance from something boring on your to-do list to something you can learn about, and connect more easily to environmental and social challenges that are very real and that may be close to your heart” she says.

“The next big frontier is impact,” she adds. Clients want their money to work for positive change—to own shares in companies whose mission is to solve environmental and social problems—so it’s  the investment industry’s job to provide vehicles that do that while also offering reasonable liquidity and risk levels, such that they are adequate for everyday retail investors.

With its wealth of consumer research and years of experience interacting one-on-one with investors, Desjardins can help advisors navigate the ESG landscape and better meet their clients’ needs. “Responsible investing has been at the core of what we do for the last 30 years,” Labelle says. “We’re excited to see more clients get excited about it, the way we have been for a long time.”

Legal note
The 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 of the date of the present 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 securityholder 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. The Desjardins Funds are offered by registered dealers