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Tomie is talking to a financial advisor to invest in managed funds. She is specifically looking for sustainability-labeled funds. What question should she ask to make sure her financial choice is sustainable and impactful?

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Tomie is talking to a financial advisor to invest in managed funds. She is specifically looking for sustainability-labeled funds. What question should she ask to make sure her financial choice is sustainable and impactful?




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    1. Anonymous

      Tomie should ask several key questions to ensure that the sustainability-labeled funds recommended by her financial advisor are truly sustainable and impactful:

      What specific environmental, social, and governance (ESG) criteria does the fund use to screen and select investments? She should look for funds with clear, strict, and transparent ESG criteria that align with her values.
      Does the fund actively engage with the companies it invests in to encourage better sustainability practices, or does it simply exclude unsustainable companies? Funds that use shareholder advocacy to push for positive change can have a greater impact.
      How does the fund’s sustainability performance compare to benchmarks or other similar funds? Looking at metrics like carbon footprint, diversity & inclusion, and sustainability ratings can help evaluate the fund’s actual impact.
      What sustainability reporting and disclosures does the fund provide to investors? Transparent, regular reporting on ESG metrics, engagement activities, and sustainability outcomes is a good sign of a genuinely impactful fund.
      Is the fund manager committed to sustainability and impact at the firm level, not just in this specific fund? Tomie should look for a manager who integrates ESG across all investments and operations, to ensure sustainability is a genuine priority, not a marketing gimmick.
      What are the fund’s holdings, and do they align with her definition of sustainability? She should review the top investments to check for any companies or industries she might consider unsustainable or misaligned with the fund’s stated approach.

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