Have you placed funds in an investment product advertised as “ecological”, “ethical” or “responsible”? If so, it may be a sustainable investment, meaning one with environmental, social, or governance (ESG) benefits. But it’s also possible that your investment is sustainable in appearance only — and that you’ve been the victim of “greenwashing”. In this age of misinformation, how can you be sure that your sustainable investment is as “green” as it appears?


Before making a sustainable investment, take the time to get informed. Consult the information published by the issuer of the investment products that interest you.
Did you know? In finance, listed companies and investment funds that offer you investment products are referred to as “issuers”. |
Issuers are required to disclose important information about the investment products they offer. Before you invest, make sure to read the available information and verify that the facts support it. For example:
- a precise and detailed description of ESG objectives
- the concrete and credible plan to achieve the objectives
- the risk factors likely to influence the achievement of objectives
- the means of evaluating whether the objectives have been achieved
Issuers must generally provide you with this information in various ways, such as in their continuous disclosure documents, press releases, websites, and ESG reports.
In addition to verifying the above, you can increase your chances of making wise choices about sustainable investments by following the 5 Steps to avoid fraud.
Important: Issuers can define their own sustainability standards. Currently, the law does not provide
As a result, it can be difficult for investors to be certain that an investment product actually delivers ESG benefits. It can also be challenging to compare sustainable investment products with one another. |
Are you a victim of “greenwashing”?
Do the ESG benefits of the investment product you’re being offered sound too good to be true? If so, you may be a victim of greenwashing. Greenwashing is when an issuer makes false, misleading, or exaggerated claims about the ESG benefits of its investment products. This practice is prohibited.
As long as regulations governing sustainable investments are still being developed, the risk of greenwashing is very real. According to a study published in 2023, only 5% of the 250 largest investment funds presenting themselves as “socially responsible” or “environmentally friendly” actually respect the objectives of the Paris Agreement.
Did you know? The Paris Agreement is an international treaty that commits 195 countries to meeting targets to combat climate change. Canada is a signatory of this treaty. |
Be careful of the risks of greenwashing if you find some of these elements in the description of an investment product:
- exceptional financial benefits with no risk
- ESG benefits unsupported by the facts
- vague ESG benefits
- no credible plan for achieving the objectives
- no means for evaluating whether the objectives have been achieved
If you believe you’ve been the victim of greenwashing, you have recourses.
- You can file a complaint with the Autorité des marchés financiers (Quebec securities regulator), an organization with the mission of protecting investors in Quebec.
- You can also take legal action against the issuer. You can ask a court to cancel the investment contract or revise the price. You can also ask a court to compensate you for any harm you’ve suffered.
Soothing your “eco-anxiety” by investing?
According to a 2021 survey, 73% of Quebecers aged 18 to 34 say they suffer from “eco-anxiety”. To meet their needs, a growing number of sustainable investment products have been developed in recent years.
Through sustainable investing, you can contribute to a wide range of ESG objectives. For example:
Environmental
Social
Governance
- reduction of greenhouse gas emissions
- waste recycling
- biodiversity protection
- fair wages
- supporting local initiatives
- promotion of equity, diversity, and inclusion
- executive remunerations
- prevention of corruption
- diversity of the board of directors
You can choose among many investment products to promote ESG objectives while respecting your financial goals. For example:
- mutual funds
- exchange-traded funds (ETF)
- stocks
- bonds issued by the Quebec government
- bonds issued by listed companies (corporate bonds)
- sustainability-related loans
Comparing sustainable investment products is complex but essential. The more time you take to become informed, the greater your chances of meeting your financial and ESG goals.