Building Trust in the Responsible Investment Industry

September 22nd, 2023 | Laure Maillard

As an increasing number of investors are paying attention to the outcomes of their investments, we are seeing more intense media scrutiny on corporate ESG-related claims. It is unfortunate that a few notable scandals in recent years have caused mistrust and concern among investors around the accuracy of environmental, social or governance (ESG) claims.

The Responsible Investment Association found that concern about greenwashing is the biggest obstacle to the growth of responsible investment (RI). It is crucial that industry actors take steps to be as clear and accurate as possible in their ESG claims. An important question to consider is “how can we build trust?”

Building Trust

Regulatory authorities around the world have taken action to curb concerns around greenwashing and supervise ESG-related claims.

In early 2022, the Canadian Securities Administration (CSA) published a staff notice outlining their ESG disclosure expectations for investment funds. It includes expectations on how funds present their ESG approaches in advertising.

While regulators are addressing greenwashing from a policy perspective, industry players and fund managers also have an important role to play. They can be leaders in maintaining the public’s trust on ESG claims and facilitate clear communication.

This is why it is essential to raise awareness about the public’s concern around greenwashing among anyone involved with the promotion of responsible investment. It is a vital step in ensuring authenticity and avoiding risks.

Responsible investment training courses for industry professionals, and advisors in particular, are multiplying. It is crucial not to forget about communications and marketing professionals, and anyone making public-facing claims while promoting RI. Awareness about the risk of the perception of greenwashing and RI knowledge should be integrated into the entire business line to ensure consistent and accurate ESG communications.

An ESG-related Guide for Communicators

To address this gap, Desjardins has developed a guide to help teams not specializing in RI address the do’s and don’ts of ESG-related communications. The recommendations include the following tips for communicators:

1. Ask questions

When creating communications about RI, put yourself in the shoes of an investor who may question the claims. Can the claims be substantiated? Do they reflect current policies? Could the claim be interpreted as exaggerated or misleading?

2. Manage expectations

While we are often proud of the outcomes our RI products can have on environmental, social or governance issues, we must avoid over-promising or over-selling what they actually achieve. Exaggeration or puffery leads to mistrust. When in doubt, limit claims to information you can verify.

3. Use simple, understandable language

Retail investors rely on us as RI experts to give them the information they need to make informed decisions. They may not have the specialized language or know all the terminology that we do, so keeping language simple and understandable will help ensure the message is not misinterpreted or misleading.

4. Verify

Cite sources whenever possible. For example, when talking about climate data, cite the source, as there are different methodologies for calculating the data. This demonstrates transparency to investors and gives them the tools to verify the information and avoid confusion.

5. Be consistent

To promote industry progress and best practices, teams should be made aware of how to describe investment outcomes. It keeps all communications consistent across the organization and avoids confusion. This training may include the following directions:

– Document outcomes when they can be supported by evidence.
– Avoid attributing outcomes to individual investors.
– Use the term ‘impact,’ in line with industry methodological best practice.

The feedback we received confirmed the need to equip teams with ESG communication tools. We continue to educate employees and our partner advertising agencies so they are better equipped to prevent situations of perceived greenwashing. Ongoing internal dialogue also helps keep everyone up to date about best practices and any new risks or developments.

Firms that are innovative and proactive about ESG-related communications and those target teams not usually involved in RI training can ensure their investors are confident about participating in RI. This is essential for the continued growth of an industry with significant potential for positive outcomes on the planet and society.

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Desjardins®, all trademarks containing the word Desjardins, as well as related logos are trademarks of the Fédération des caisses Desjardins du Québec, used under licence.

RIA Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.


author's photo

Laure Maillard

Senior Advisor, Responsible Investment

Within the Responsible Investment (RI), retail solutions, Laure is responsible for RI disclosure. She manages the publication of the RI annual report, the annual PRI report, and framework texts (RI policy, stewardship policy). An important part of her activities involves supporting the marketing and communications teams in developing IR messages. Since 2022, Laure has been a member of the PRI Quebec Network Advisory Committee. Before joining Desjardins, Laure held several positions at the Caisse des dépôts et Consignations in France (CDC), a public financial institution that pioneered the financing of social and environmental projects. Laure holds a Master's degree in Applied Economics from the Institut d'Études Politiques de Paris (France), and a Bachelor's degree in Economics from Université Paris 9 Dauphine. She also holds the Sustainable Investing Professional Certification (SIPC) from Concordia University's John Molson Centre for Business.