More Money Podcast - 229 What You Need to Know About Responsible Investing - Guy Cormier, CEO of Desjardins

Episode Date: February 27, 2020

A few weeks ago, I got to co-host a really special event called “A Greener Dollar” with Desjardins CEO Guy Cormier, and after that event, he sat down to do a podcast episode with me so we could dive deeper into the topic of responsible finance and investing. Something you should know about Desjardins is that they have been at the forefront of responsible investing going back 25 years with the launch of their first SocieTerra funds. Since then, they’ve built a number of responsible mutual funds and ETFs, and hope to be a leader in promoting responsible investing to the masses. As Guy mentions in the podcast, more business leaders need to step up and take more action when it comes to sustainable growth in the financial industry and in the greater economy. Although many leaders and companies are profit-first thinkers and simply focused on getting high returns, things need to shift in the investing world. There needs to be more transparency, inclusivity, and we need to protect our future. And one big way this can be done is by offering responsible investing products and having the conversation with investors. Hopefully, one day responsible investing will simply be called investing, and there won’t be so many different interpretations of what it means to be responsible fund or responsible investor. Until then, what we all can do is to be more intentional with our investing dollars and to keep the conversation going so more people are aware of their options. For full episode show notes visit https://jessicamoorhouse.com/229 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 229 of the Momenty Podcast. I'm your host, Jess Morehouse, and this is a special episode. I was lucky enough to have been flown out to Vancouver a few weeks back, which was lovely because that's where I'm from. I got to visit the fam, but also I was specifically there to partner with Desjardins to co-moderate this event called A Greener Dollar. It was a roundtable discussion with myself. My other co-moderator was CEO of Desjardins, Guy Cormier. And we got together with a group of millennials who worked in the sustainability space. And we basically just wanted to get together to have a discussion about sustainable or responsible finance and investing.

So I've talked a little bit, I think, on the podcast, like not a ton on this podcast about the topic of responsible investing. But it is something that is becoming, luckily, a lot more prominent and popular. And it is just like a really, I think, just look at the news, see what's going on in the world. It has never been more important to be intentional with how you invest your money. And so that's why we got together. So we can kind of talk from the finance space and the sustainable space and see, okay, what are you looking for? What change should be made? How can we all continue to promote this idea of sustainable investing and responsible investing? And it was honestly so much fun. I'm going to share a blog post on my blog, jessicamorris.com soon. And I will also be

sharing a video about responsible investing on my YouTube channel. So make sure to check those out. I will include links in the show notes for those, which you can find at jessicamoraz.com slash 229. But for this episode of the show, while I was in Vancouver after the event, I got to interview Guy Cormier on the topic of sustainable investing. He is very knowledgeable about this topic. Desjardins itself has been at the forefront for responsible investing because they actually launched responsible mutual funds back in the 90s. So they've been doing this for a long time. And so

this is why they really want to kind of champion this and really get the word out about what it means to be a responsible investor, how to do it, and what the benefits are really, and why responsible investing is kind of for everyone. So I'm excited to share this episode with you. And without further ado, let's get to that interview with Guy. Welcome, Guy, to the Mo Money Podcast. Thank you very much, Jessica. It's a real pleasure. Oh, good. I'm so excited to have you on the show because, I mean, we literally just finished an amazing group discussion called, it was, the event was called A Greener Dollar. It was so exciting to see all these people so

passionate about talking about investing and also sustainable finance. So I'm so excited to kind of continue that conversation with you one-on-one for the podcast. First, can we start by just getting to know you a little bit more? Introduce yourself. You're the CEO of Desjardins. Why are you here in Vancouver discussing sustainable finance, first and foremost? Well, because it's so important for us to be part of the solution. And it's in our DNA to enrich the lives of people in communities. Our members, our clients are looking at us and they have expectations as

a co-op to have a long term view of the way we manage Desjardins and our sustainable development could be something that is part of our activities day after day after day

with our 45,000 employees across the country, all of our business lines, all of our activities that we're doing. I think it's really important that leaders, business leaders, step up and play a role that is more important in society regarding sustainable growth, sustainable finance, just sustainable economy. Because if we feel that someone else should do it, or because we have issues or challenges in our own companies, it's going to be too late. So we have, I think, as a responsibility as business leader to promote and to be too late. So we have, I think, as a responsibility, as a business leader,

to promote and to be active on that side. Yeah, yeah. I definitely believe that if we don't do something now, it's going to be too late. So we need to start taking action. Why did Desjardins specifically decide to grow its retail offerings in this area? So I know, I did a little research about the history of Desjardins, and it's been in this space. So I know I did a little research about the history of Desjardins

and it's been in this space, sustainable finance, sustainable investing and having those offerings available for a few decades now. Yeah, 25 years. It's been 25 years, more than 25 years that we launched the first Sociatera fund,

really responsible investment mutual funds. And it started slowly. And now what we have seen in the last few years is really a need expressed by our members and clients. So we just launched a new ETF a year ago, a year and a half ago. We signed the UNEP principle for responsible banking. This September, we're the first financial institution in Canada who signed these principles.

So for us, it's a way to lead by example and also to always work in the best interest of our members and clients. And what they are expressing us right now, it's a sense of purpose from our organization. They want to feel a Desjardins group that is really proactive in the products, where we innovate with our products, where we are transparent with what we're doing with their money, with their investment, and where we try to reach and accomplish a purpose that is greater than only making profits.

Let's put it this way. Yeah, and for me, that's very forward-thinking for a pretty big financial institution. I feel like the only kind of companies I know that are doing that are relatively small, so it's exciting to see someone taking the charge as a really big voice in the financial landscape in Canada. Well, when you think of that, when Alphonse Desjardins started Desjardins 120 years ago in 1900, it was small. It was a startup at this time. But startup wasn't a word at this time.

That's all. But it was a startup. And it starts slowly. And now you have a group of 45,000 employees, more than 7 million Canadians, people from Quebec and Canadians are doing business with us. But this, as a co-op, this opportunity to have a long-term perspective, a long-term view of our decision, not necessarily being under pressure of the quality results or the short-termism of some of our decision, this is something that, from my perspective,

is really, really important. And if we're still in business after one century, it's because we took decisions having in view the next decades, not the next quarter or the next year. And the decision that we took regarding responsible investment or sustainable finance, even if we have to continue to be better and better on different aspects of our activities, at least it's a strong signal to our members

and to our employees that we're really commit, totally commit on this issue that we have to face. Now, why do you think this is so important or a big issue specifically when we're talking about young people? Well, it's because young people are looking at the last 30 and 40 years of our economy and our society, and they look at capitalism. They look at what happened since 1980 with the promise of a capitalism that will bring more richness on the earth, that will bring more people around the table. And to some extent, the answer is yes. There's less poverty around the globe. There's more people who are in the middle class now

than it was 40 years ago. We have seen a lot of innovation, technological innovation, quite amazing. But at the same time, there is collateral damage on that side. And collateral damage is some people that are still out of the system, some really strong big challenges with the environmental issues that we're facing right now. There's a price to pay. So I think the younger ones are really in a mood right now where they are,

okay, we look at the last 30, 40 years. There's really some aspect that we're really positive. But the next 30, 40 years can't be like that. We have to learn and we have to find a way to be more inclusive in the future that is not necessarily the same with all the external output that are a bit more negative than it has been in the last 30, 40 years. And it was interesting to get the perspective of the young people in the roundtable today. It was interesting just to hear that they weren't, and maybe this is unique for me because a lot of people I talk to that are just in the finance space,

not the sustainability space, really are like, I just want to get returns, returns, returns. But it was interesting to hear from folks that aren't deep into that world. They're like, I would actually sacrifice returns or even pay more fees or both if it means that I can actually invest in a way

that makes me feel good about the impact I'm going to have on the future. This is something for us that is, this is a trend that is starting right now. It's not totally clear, already younger one, or even people are about investing in a fund or in a project where they already know that maybe returns will be low. But at the same time, this is not true because many, many studies showed, and many studies, like I said, showed that these kind of investment, let's say green investment or climate change investment, let's say green investment or climate change investment, won't give necessarily less return. This is a myth. This is not true. So we have to continue to educate the people.

And there's so much project right now around the globe, more than 10, 15 years ago, that it's really possible to build a balanced fund with many kind of projects, and you will have a return that is better than any indexes around the globe. So we have to be really careful about the fact that this myth that if you invest in solar, if you invest in windmills, if you invest in any kind of projects that are too close to environmental perspective or purpose,

your return will be less than a normal investment. This is not true. And for the fees, because I know for a lot of the institutions that offer responsible investing funds, usually the fees are a little bit higher. Do you feel like as they become more popular or commonplace, the fees will kind of decrease and then it won't be that you have to pay higher fees just in order to invest sustainably? Well, it's already the case because just look at Desjardins. We used to have mutual fund with some fees and these funds, we launch ETF with less

fees, less fees, but the impact on the environment and the projects are quite the same. But because the volume and the scale is there, we have been able to reduce our costs quite effectively because of that. So I think more and more people will decide to, or make the choice that they want to invest or ask their financial institution that they want product that will have an impact on the economy or in the environment or on the society. Well, it's scale, it's more volume,

and it's easier at that time to reduce some of the costs. And at the same time, some financial institutions, some final group like Desjardins have to accept that we're not there to make 25% return on these funds. But we can make less than that, but we're there for the long run, the long perspective. It's not just about making that quick dollar. It's about, well, we have to,

and I think one of the big kind of topics of the conversation is like, we're investing our money, and yes, we want to have low fees and high returns and all that stuff, but we need to make sure that our planet is going to do okay and it's going to be here for the next several thousands of years. And right now, it's looking a bit crazy. I think there's more and more leaders right now who are looking at that as, do I really need to make 15, 20, 25% return for the next few years if I'm not even in business in 50 years? And there's more and more people who are

thinking like that and try to balance the way they want to manage their company and the way they want to offer products to their customers. And there's more and more citizens and customers who are in a mindset of, okay, yes, I can take this level of risk, but at the same time, maybe I should look at some other investment where I can have an impact on society and economy. And I think more and more people are ending in this direction. Another kind of thing that we talked about was when we're, you know, it seemed like a lot of people, especially at the session today, were like, yes, I'd like to invest in sustainable products,

but what are my options? It doesn't seem like there's a lot. Do you want to kind of talk a little bit about what are the options for, as a Canadian investor, where can you look to invest in responsible investments? Well, there's, I don't just want to talk about Deja Vu, but when you look at our institution and our products, there's more than 20 products that you can have access. And so you're talking Deja Vu specifically,

you've got mutual funds and you have the ETF fund. Mutual funds and ETF. Yes. Which different purpose, sometimes it's really specific on environmental issues. Sometimes it's to social impact for children

or specific projects connected with the UN principles. So you have this range of product. And other institutions, other financial institutions, but one of the issues that we're facing right now is there's many products, and some of them, the criteria, or there's a lack of taxonomy, and there's a lack of information, and it's not so clear. The definition of these funds, of what they're really doing, are not the same and are different from one institution to another.

So I understand that for an investor. What's the meaning of my investment if I do business with this financial institution compared to another or this wealth manager or this pension fund. Sometimes the definitions are not the same. Everyone's using different terms. Yeah, that's it. So we need, I think, a bit of standardization or common language regarding that. We have the ESG criteria, environment, social and governance, impact on economy. ESG criteria is the criteria that we have introduced in our activities since 2017. But even though some people are using ESG criteria with different definition of impact

on social impact and governance impact or environmental impact. So I think we're heading in the right direction. We're being more mature, more and more as an industry, but we have still to continue to work hard. Yeah, and that's definitely some of the kind of opinions I've been getting from other people in the kind of sustainable finance space is a lot of people like to say,

oh no, this fund, it's green or it's socially responsible or whatever. But then someone would be like, oh, but you have this company in that fund and it's, in my opinion, it's not. And so there's a lot of confusion of like, what can I trust? Well, you have some funds where you won't have any investment in fossil industry, but there's some people who wants to invest their money over there because they feel they want to be engaged investors and try to influence board of directors, management committee.

So for them, they want to be in the field, on the ice, and work with these companies to try to make them evolve or transform their business. So for them, it's sustainable finance. For other people, they don't want to be on the ice. They don't want to be around the table. They don't want to even put money in these companies. But I think the key word here is transition. It's transition from one economy, from one business sector to another one

and have a discussion, a dialogue with all the players. If we try to withdraw from the table with some players, maybe they won't change or they won't be open to a discussion. So from our perspective, even Desjardins, there's some of our investment that are with companies that from our perspective, we're there to influence them and to bring another point of view about how should they transform their activities. So it's from our perspective is a way to have an impact in society too.

So if someone isn't invested in some of these termed responsible investments, is there a way that they can actually look into their investments? Maybe it's not possible and be like, am I making a difference? Is what I'm investing in maybe does fit that ESG criteria? Or right now, if you're investing in a fund that doesn't say explicitly, we follow this criteria, then most likely you're probably investing in some companies that aren't so good. Yeah, well, it's still a challenge. It's a very good question because we need to work on disclosure because, like I said previously, sometimes the definition are not the same, the rules are not the same.

And when I look as a financial institution, the KPI or the financial data are so clear. You have your financial statement each quarter, and it's really easy to have access to that. It's not the same right now with the ESG criteria or with any environmental or climate change criteria. So I think we have to have a better disclosure process in the next few years, and people are working on that in Canada right now. so we're we're we're like i said we're reading in the right direction i'm totally convinced of that but you have you have you have a lot of information most of the time from some financial institution financial group insurer about their their social responsible environmental documentation each year each each quarter. You have all the annual report of these financial institutions or these mutual funds, annual reports

that will give you a lot of insight, a lot of information about what they're doing with your money. But there's still room for improvement. I'm totally convinced. And for people who are listening right now and they're like, I'd like to make an impact, don't have any money to invest right now, is there anything that they can do? Do you have any advice for them?

Because I feel like you probably know a lot about making an impact and being involved in this space. I think the first thing is even if you're not investing right now, at least start learning. Right. start learning right start to educate yourself by maybe going on some blogs like what you're doing or or or just on internet or having a discussion with people about what are you doing so at least you start having a conversation dialogue and you you internalize some concept uh and you and you start your research about if i would have $1,000, $5,000, $10,000, $25,000 to invest, what would I do now? So at least it's kind of not a real portfolio.

At least it's a portfolio where you start to learn from that. The second thing is, even though I understand very well that at some point of your time, there's a challenge to save money. The key word here is start as young as you can, because it's not just a question of returns. It's a question of how long you invest your money. And it's a big difference to invest your money for 30 years or 40 years compared to 10 years and 15 years. So I have four young millennials at home. And when I'm having discussion with them about starting young, they'll look at me and they said, okay, yeah, it's interesting,

but I have other challenges. You know, I have to pay my debt. I have to pay my credit card. I want to travel. I want to have fun. But at least if people can just budget their life a bit, not budget their life, but their portfolio or their revenues, and try to find a way to start,

even if it's little as a few hundred dollars per year, at least you're starting something, you're in the game, and you're learning. And in a few years, maybe it'll be a few thousand dollars. But all those years that you would have started maybe earlier, whatever the returns are, these years will be so important in 30, 35 years. So I think it's a way of continuing to learn, start something, even if it's not important from your perspective. But nothing is not important when you're saving money. So I think it's a few tips that I would share with you.

No, definitely. And I feel like one thing too that I feel like was kind of brought up, because there's a lot of different, people were at lots of different investing stages in the group today, which was very interesting. And I think a lot of people, especially that are just getting started, feel like, well, if I start investing this way, I'm kind of stuck with that. I think it's important to note that you can change your investment portfolio at any point. You're not stuck with it. Weekly, monthly. You can change, but it's really important to start. And then as you learn more, you can tweak and then kind of eventually you'll probably find the perfect way to invest or portfolio for you. This is something I've learned this afternoon with the people who we're with,

is it's one thing to invest your money, it's another thing to know what you're doing. And a lot of them told us that they're sometimes a bit scared, they're not too confident about investing their own money, because they don't feel they have all the knowledge about it. But at least if you're not investing directly, at least just starting to have a better understanding of what are my options? When we talk about responsible investment fund, what are we talking about? Can I read on it? Can I learn on it? So when you'll be ready to invest, at least your options will be more clear what you

want to do. I think it's a way to already start your your process of investing and building your future now before i let you go since we did have just such an amazing conversation with all these amazing people today what was your biggest takeaway from hearing just some of their thoughts their opinions or questions um i think no single person, no single country, no single company has all the skills, the technology, the knowledge, the money to fix all the issues right now regarding sustainable finance or environmental issues or climate change. It's really a concept of transition. Everyone has to make an effort to try to do better, to move the needle. Do we have all the solutions now? No. Does anyone have the solutions to fix

the issues? No. But if we collaborate, if we cooperate, if we continue to have a dialogue on this topic and try to see if we can find solutions all together, I think it's the way to build an economy and a society that will be different than the last 30, 40 years, and we will still have challenges to face, but at least we'll work together to fix these issues because environmental issues are not something

that start on one coast of our country and close to another coast of the country. It's a worldwide issue. So we have to dialogue, and no one can fix that by himself or herself. Yeah. Oh, that's a great way to end the podcast. Thank you very much.

Some inspiration for everybody. Where can people find more information? Are you online? Can people find more information are you online can people find you and follow you they can follow me I have a Facebook page that people can follow me I'm posting many many comments

or information or some activities that I'm working on it's on thedejardin.com and you can have access to Geek on Me, Facebook. So really humbly, if I can have an impact and continue to manage our company as properly as I hope I can and continue to at least demonstrate leadership on how financial institution can be more proactive to build a better society, a better economy.

At least it's one of my personal goals. Awesome. Well, thanks so much for taking the time to chat with me. Thank you very much, Jessica. It's a real pleasure to be with you this afternoon. And that was episode 229 of the Mo Money Podcast with CEO of Desjardins, Guy Cormier. Make sure to check out the show notes at jessicamorehouse.com slash 229. And like I mentioned, I also will have a blog post and a YouTube video that I made about responsible investing. I'm going to include links in the show notes, which you can find at jessicamorehouse.com slash 229. But also just make sure to go to my blog, jessicamorehouse.com slash blog to

find it and go to my YouTube channel. You can find it either at Jessica Morehouse dot com slash YouTube or YouTube dot com slash C slash Jessica Morehouse one. So or just Google Jessica Morehouse in YouTube and you will find me. I'm putting out a lot more videos so you definitely want to want to check it out and subscribe, you know, just do it. Anyways, so if you want to learn more about some of DayJar Day's particular offerings, they have mutual funds, they have ETFs, um, and a lot of different variety, which is really exciting. If you're looking for something specific that's, you know, that's focused on, you know, clean tech or whatever, they have so many different types of funds, um, and a lot more information about responsible investing and, and how they're, you know, there's a lot of transparency,

which I really appreciated, um, when, um, I really appreciated when just working with them and learning more about their kind of product offering. So if you want to learn more about just like what is this all about, definitely go to Desjardins.com. And again, I will include a bunch more important links to some of their best resources on responsible investing in the show notes, JessicaMorganHouse.com slash 229. So yeah, that is kind of it for me. I hope you really enjoyed this episode of the podcast. I will be back here tomorrow with another Money Minute episode, which you will not want to miss. Thank you so much for listening, and I will see you back here tomorrow.

This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.