It's no longer a secret that Responsible Investing's stock is on the rise.

But beyond the appeal of making your money matter, what is the present and future of RI - during a global pandemic, under the spectre of climate change and amid social currents that have changed how millennials view their place in society and their impact on the economy?

Marie-Justine Labelle, Responsible Investment Practice Lead at Desjardins, helps us look past the hype to uncover how your investments can lay the groundwork for a better tomorrow, while keeping you on the positive side of the ledger.

Responsible Investing has been around for decades, yet it still seems novel and somewhat misunderstood. Why is that?

It's true. I think the fact we don't have standardized definitions has created some confusion. Providers use terms such as "ESG", "green" or "impact" investments to refer to different approaches and levels of ambition, and these nuances are not well understood by retail investors.

What we do know is that taking environmental, social and governance issues into consideration - the core tenet of RI - helps you better manage risk in your portfolio. Millennials have really been the driving force behind the growth of RI because they get that RI makes good business sense. They also want their values reflected in all aspects of their lives, which also guides the type of organizations and brands they're willing to invest in.

How hard is it to assess and measure the positive impact of your investments?

It's a challenge - there are still many issues related to data availability and methodological developments. Having said that, we're becoming more sophisticated in how we can influence companies and make them more accountable. Responsible investing is a powerful way for individuals to use their voice and the more people get into it, the multiplying effect gives us greater leverage to effect change and generate positive outcomes.

Has the pandemic changed investing habits and needs? If so, how?

It's interesting because whether you were among those who experienced financial hardship or found yourself in the more fortunate situation where you've been spending less and saving more, I think the biggest takeaway is that most people want to be more disciplined with their finances, they don't want to be caught off guard and they want to think more long term and save for retirement.

How can people protect themselves against "green-washing" and recognize when it's nothing more than marketing-speak?

As with most products, if the claims sound too good to be true, that's because they usually are. You have to look beyond an investment product label to understand what it's really about. The most important thing to do is to find an advisor or product provider that you believe in, that has shown longstanding commitment to tackling environmental and social issues and that is willing to work with you to answer your questions on RI, understand what matters to you and find the right product for you.

What's your advice to anyone who's contemplating diving into RI?

I'd say just get started and dip your toes. We can get a bit lethargic about taking care of our finances and making changes to our investment approach. But taking that first step is really rewarding, and as you go you'll learn more about RI, and what products suit you depending on what is most important to you. In the end, there's no big mystery to it: just as you would for traditional investing, get in early and let the magic of compounding do its work - and think long term, the same way you would expect companies to think about their business.

Marie-Justine discussed all this and more this month with FLARE and TL Insiders. See out the full discussion here.

Learn more about Responsible Investment with Desjardins

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