With a surging interest in environmental, social and governance (ESG) investment strategies, New Brunswickers are encouraged to do their due diligence before investing in companies or products labelled “responsible.”
That’s according to the Financial and Consumer Services Commission (FCNB), which is using Investor Education Month in October to inform New Brunswickers of the risks associated with ESG investment strategies.
Many companies are taking steps to be responsible, from reducing greenhouse emissions to ensuring a diverse workforce. An emphasis on ESG factors from financial professionals and the media, coupled with the desire to invest in companies making a positive impact, has led consumers to consider these factors in their investments and everyday purchases.
As companies aim to meet this consumer demand, the risk of greenwashing increases. Greenwashing is when a company or organization presents exaggerated, false or misleading information to make it appear as though they are more environmentally responsible or sustainable than they are. Companies have also been known to exaggerate or provide misleading information on their social and governance factors to attract investors.
“Making socially responsible investment decisions is more than hearing what companies say, it’s about understanding what they do,” said Erin King, acting director of communications and public affairs at FCNB. “Before you invest in a company that boasts about their ESG initiatives, do your homework or seek advice from a registered financial advisor to make sure the investment product you are considering isn’t overstating its commitment to ESG.”
Investor Education Month is a national campaign that takes place in October. This year, FCNB will be promoting investor education resources such as a guide and a new quiz to help educate New Brunswickers on ESG factors and considerations for socially responsible investment strategies.
“ESG factors help investors examine some of the values of the companies and funds they invest in and learn about the environmental, social and governance impacts of their investment decisions,” said King. “Investors are encouraged to take the time to understand the companies and funds they are investing in before parting with their money.”
Audio files of Erin King, acting director of communications and public affairs at FCNB
FCNB has the mandate to protect consumers and enhance public confidence in the financial and consumer marketplace through the provision of regulatory and educational services. It is responsible for the administration and enforcement of provincial legislation regulating mortgage brokers, payday lenders, real estate, securities, insurance, pensions, credit unions, trust and loan companies, cooperatives, and a wide range of other consumer legislation. It is an independent Crown corporation funded by the regulatory fees and assessments paid by the regulated sectors. Online educational tools and resources are available at www.fcnb.ca.