SUSTAINABLE
INVESTING

Live for today. Plan for Tomorrow.

Sustainable investments, more commonly called responsible investments (RI), involve investment decisions that help avoid, reduce or eliminate the environmental, societal or governance (ESG) risks associated with a particular investment.

SUSTAINABLE INVESTING

Balance. It’s not just our name, it’s at the core of everything we do – both professionally and personally. Our goal is to help our clients achieve balance in their own lives. Nowhere is this truer than when it comes to balancing your personal values and your financial needs. For that, you may want to consider sustainable investments.

Sustainable investments, more commonly called responsible investments (RI), involves investment decisions that help avoid, reduce or eliminate the environmental, societal or governance (ESG) risks associated with a particular investment. The financial goal of the sustainable investment process is to potentially improve long-term investment returns by reducing these risks. Increasingly, the evidence suggests that the performance of sustainable investments matches or exceeds that of more conventional investment options.^†It’s for this reason that Balance Financial chooses to use the term sustainable investment – investments that promote environmental and societal sustainability that may lead to financial sustainability.^‡Match your investment decisions to your personal values today by asking us how you can use sustainable investment to further your personal and financial goals.

^† https://carleton.ca/3ci/wp-content/uploads/SRI-Funds-Risk-and-Return-Analysis-final-22052015.pdf

^‡https://www.riacanada.ca/ri-marketplace/investment-advice/ri-advisors/

WHAT IS ESG?

ESG stands for Environmental, Societal and Governance risks.

Environmental Risks – Considers the potentially negative impact on air, land, water and human health.Examples of environmental risks include climate change, greenhouse gas (GHG) emissions, resource depletion, waste and pollution, and deforestation

Societal Risks – Addresses matters such as human rights, supply chains, worker safety and aboriginal rights. Examples of societal risks include child labour, slavery, conflict, worker health and safety, relationship with local communities.

Governance Risks – Encompasses areas such as corporate board independence and diversity, corporate risk management, and excessive executive compensation. Examples of governance risks include – executive pay, bribery and corruption, political lobbying and donations, board diversity and structure, tax strategy, independence of auditor, national government policies

WHAT ARE SOME WAYS TO APPLY SUSTAINABLE INVESTMENT?

Negative screening – the elimination or avoidance of companies that engage in undesirable activities, such as the production of certain products (e.g. tobacco, alcohol, weapons, pornography, nuclear power, pesticides, gambling, etc.), or environmentally and socially harmful operations.

Positive screening – the inclusion of companies that make a desirable contribution to the environment or society, either through the production of goods and services, or their corporate operations.

Engagement – interacting directly with corporations in an effort to bring about positive change in their practices and behaviour. Engagement may be undertaken by the investment firm as a shareholder (in concert with other shareholders) or directly with a corporation’s management team.

Impact investment – directing investment dollars in a way to help benefit communities and society directly. This includes microloans, clean water programs and initiatives with indigenous groups.Sustainable investment is the term used by Balance Investments to characterize all investments that offer the potential for long-term ESG benefit. While this includes investments that are categorized specifically as responsible, it would include investments that have the potential to benefit the environment, society and the investor over the long-term.

For more information, please visit any of these resources:

Responsible Investment Association of Canada https://www.riacanada.ca/

United Nations Principles for Responsible Investment https://www.unpri.org/

Important information about mutual funds is found in the Fund Facts document. Please read this carefully before investing. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Unit values and investment returns will fluctuate. This website is intended for Ontario residents only.