Responsible Investing

Align your investments with your values
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What is ESG?

“Responsible investment is an approach to investing that aims to incorporate environmental, social and governance (ESG) considerations into investment decisions, to better manage risk and generate sustainable, long-term returns.”
— UN Principles for Responsible Investment

ESG are factors that provide a framework for breaking down the concept of sustainability into the three primary areas of responsible investing. This includes:

  • Environmental
    Climate Change • Water Management • Pollution
  • Social
    Labour Standards • Human Rights • Health and Safety
  • Governance
    Executive Pay • Business Ethics • Corporate Governance
What are the merits of an index based ESG solution?
  • Index-based Responsible Investing strategies are often uniform across all geographies and market capitalization and ensure consistent implementations across all mandates
  • Index-based strategies are easily measured and monitored. Leading providers such as BMO ETFs, have transparent rules which means that ESG performance can be evaluated at both the “company” and “portfolio” level helping you answer important questions like “how much lower is the carbon footprint of our strategy vs the benchmark?”. Also, being able to easily measure and monitor the ESG performance
  • The rules of an index are transparent and have exclusions like alcohol, tobacco, firearms, and unconventional oil and gas, that will appeal to individuals with the strongest opinions. Knowing the rules makes it easier to seek consensus, you can ask important questions up front, “How has my ETF performed from an environmental or social standpoint?”

If you are looking to add ESG ETFs to your self-directed portfolio, BMO has expanded the range of ESG ETFs including the BMO Balanced ESG ETF (ZESG) and are available through any online brokers. They offer: Canadian, US and international equities and bonds, using MSCI’s environmental, social and governance (ESG) rating system.

Resources
Understanding ESG ETFs
Decoding Responsible Investing
BMO MyESG™ Interactive Tool
BMO ETF Voting Dashboard

MyESGTM and the BMO GAM survey are intended for educational purposes only and should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional. The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual security. Please speak with your investment professional to determine the solution that best meets your individual investment needs and circumstances.

This communication is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.

The portfolio holdings are subject to change without notice and only represent a small percentage of portfolio holdings. They are not recommendations to buy or sell any particular security.

Commissions, management fees and expenses (if applicable) all may be associated with investments in BMO ETFs and ETF Series of the BMO Mutual Funds. Please read the ETF facts or prospectus of the relevant BMO ETF or ETF Series before investing. BMO ETFs and ETF Series are not guaranteed, their values change frequently and past performance may not be repeated.

For a summary of the risks of an investment in the BMO ETFs or ETF Series of the BMO Mutual Funds, please see the specific risks set out in the prospectus. BMO ETFs and ETF Series trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.

BMO ETFs are managed by BMO Asset Management Inc., which is an investment fund manager and a portfolio manager, and a separate legal entity from Bank of Montreal. ETF Series of the BMO Mutual Funds are managed by BMO Investments Inc., which is an investment fund manager and a separate legal entity from Bank of Montreal.
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