Align your investments with your values. The decisions you make impact the world today and shape it for future generations. Historically, it has been challenging for investors to apply their principles and values to their investments, but now they can. We’re proud to introduce a solution that allows you to raise the bar on your investments. What is ESG? Environmental, social and governance (ESG) are labels for the key factors and considerations used by investment decision makers. ESG investments are similar to traditional investments except they go a step further in the investment decision-making process. In evaluating stocks or bonds as part of the investment process, ESG investments consider the impact of environmental, social and governance factors in addition to traditional financial factors. An investment might exclude certain companies or industries that have low ESG scores (negative exclusion), or it might focus on including “best-in-class” companies with high ESG scores (positive inclusion).
Environment Climate Change Water Management Pollution
Social Labour Standards Human Rights Health and Safety
Governance Executive Pay Business Ethics Corporate Governance
How ESG benefits investors
Aligns client sustainability preferences with investments
Builds a higher-quality portfolio with the potential to improve risk-adjusted returns
Invests in companies that are well positioned to thrive based on future regulation changes
Meets the needs of all investors who want to be active participants in making the world a better place
Why should I consider ESG investments? The purpose of ESG investments is to allow investors to better manage risks to generate sustainable, long term returns. That means aiming to minimize the risk of losses and it can also mean looking for opportunities to add returns. Identifying ESG-related risks and opportunities can improve investment returns by:
Identifying and limiting exposure to longer-term and systematic risks (like climate change)
Identifying and limiting exposure to nearer-term and company-specific risks (like data security)
Adding exposure to companies with a good track record of managing ESG-related issues, which can lead to better investment returns.
Investing with your values has never been easier. BMO Sustainable Portfolios are purpose-built to help you hold your investments to a higher standard. Investors can select a BMO Sustainable Portfolio based on their individual investment goals and objectives – whether that’s saving for a future vacation home, helping a family member achieve their dreams, or funding a comfortable retirement. All portfolios are designed to be well-diversified, key investments that deliver the highest potential returns based on your risk profile. Visit our website for more information: www.bmo.com/sustainable Take a look at the documents below should you wish to learn more about ESG factors: ESG Frequently Asked Questions BMO Sustainable Portfolios Responsible Investing and ESG: What’s right for your portfolio? Decoding responsible investing