We believe that environmental, social and governance (ESG) factors must be considered across asset classes. Incorporating ESG factors throughout the investment process helps us to better manage risk for our clients and contributes to long term performance. We also support initiatives that seek improved corporate disclosure, which in turn empower investors to make more effective evaluations of risk and return.
We consider ESG factors alongside other factors when making investment decisions because they can affect risk and return. For example, we can evaluate how our external fund managers have integrated ESG into their management processes. In our direct investments, including infrastructure and real estate, ESG factors are evaluated, where applicable, in the due-diligence process and monitored over the life of the investments.
The Role of Engagement
We believe that being an engaged investor reduces investment risk and contributes to enhanced returns over time. IMCO discusses ESG concerns with corporate boards and management teams. We collaborate with other institutional investors to have a more pronounced impact on ESG practices, such as advocating for improved corporate disclosures. We also participate in domestic and international discussions regarding standards and best practices in responsible investing.
IMCO is developing a track record for putting our responsible investing approach into action. We continue to look at ways to manage ESG factors and to collaborate with asset management peers.
Our real estate partner, Cadillac Fairview, is an industry leader in their commitment to environmental sustainability. For example, IMCO holds a non-managing interest in the Toronto-Dominion Centre in downtown Toronto, where all six towers are certified to LEED® Platinum certification. We are currently working with CF to build a new 32-storey office tower to LEED platinum specifications in downtown Toronto.
We are members of the 30% Club, which campaigns to achieve better gender balance at the board and senior management levels. Along with our peers, we have signed a joint investor statement that calls for 30% representation of women on the boards and executive management teams of S&P/TSX composite index companies by 2022. The Investor Statement commits its supporters to playing a proactive role and engaging with investee companies on corporate governance issues.
Proxy voting increases our influence with the companies we invest in and affords us the opportunity to encourage corporate practices that will enhance long term shareholder value. Our proxy voting approach is based on industry best practices and allows IMCO to be responsive to market conditions and individual company circumstances.
G7 Global Investor Statement on Climate Change
We joined over 300 leading investors around the world in signing a letter to G7 leaders (ahead of June 2018 summit), which reiterated our full support for the Paris Agreement on climate change and strongly urged all governments to implement the actions needed to achieve the goals of the Agreement.
Canadian Coalition for Good Governance (CCGG)
IMCO is a member of the Canadian Coalition for Good Governance (CCGG). We are part of a group of leading pension funds and asset managers from across Canada who promote good governance practices in Canadian public companies and the improvement of the regulatory environment to best align the interests of boards with those of their shareholders, and to promote the efficiency of Canadian capital markets. IMCO supports CCGG’s direct engagement with Canadian public companies and CCGG’s public policy submissions, guidance and research.