New approaches for defined contribution plans 

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Investing aligned with values

Sustainable investing has grown increasingly sophisticated in recent years. Watch this video to learn about three approaches to incorporate sustainable investments in defined contribution plans – and learn which one is right for you.

Deliver sustainable investments to DC plan members – without sacrificing performance

Today, sustainable investing is about much more than just “avoiding” stocks that seem irresponsible. These investments make up more than $46 trillion in assets worldwide¹, and Canada is one of the fastest growing countries for sustainable investing².

Organizations are rethinking their values and defining sustainability objectives. Plan sponsors like you can help reach these goals by aligning investments accordingly.

As the sustainable investing landscape has become more sophisticated, it’s time to consider three approaches to employee defined contribution (DC) plans:

  1. “Screening out” sectors or stocks that don’t align with a particular value
    This approach historically focused only on what not to invest in, with little regard to its impact on fund performance. Today, some investment managers are succeeding with a screening approach. You’ll need to strengthen your due diligence process, to uncover which managers can do this effectively and consistently.
  2. “Thematic” or “impact” investing
    Here, managers seek out investment opportunities that support a specific cause, such as mitigating climate change. While this approach had been considered too narrow in the past, new, more well-rounded options are now available to investors. With smart execution, impact investing can generate positive social or environmental benefits while also delivering strong returns. In addition, impact investing in private markets is a rapidly growing subset of sustainable investing.
  3. ESG integration

    This most widely used (and least understood) approach incorporates environmental, social and governance principles into the DNA of the entire investment process. Research shows that integrating ESG doesn’t necessarily mean sacrificing performance. It could even help mitigate certain ESG-related risks within an investment portfolio.

    Wherever you are on your ESG journey, we can help you define and achieve your sustainability objectives.

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