What is responsible investing?
Responsible investing means applying a strategy and investment process to incorporate environmental, social and governance (ESG) factors into investment decisions. That means looking at what kind of impact a company has on the environment, how it treats workers and communities, and how it manages and governs itself.
Responsible investing isn’t new to us. We launched our first fund with specific ESG criteria 20 years ago. Now, by including responsible investing strategies in all the funds we manage, GLC is leading the way to a more sustainable global financial system.
Some examples of ESG factors
|Carbon emissions||Community relations||Board structure|
|Climate change||Diversity issues||Bribery and corruptions|
|Habitat protection||Employee relations||CEO/Chairman duality|
|Energy usage||Health and safety||Executive compensation|
|Waste and recycling||Human rights||Shareholder rights|
|Water management||Product responsibility|
The goal of responsible investing is to combine portfolio returns and risk management, while better reflecting investors’ values within the overall strategy of the portfolio.
Responsible investing is about investing for a better future – for the planet, our communities, and our investors.
Multiple approaches to responsible investing
Not all responsible investing approaches are alike, and you don’t have to sacrifice leading portfolio management or good returns. Investing in a portfolio that meets financial needs while supporting values is not only possible, but should be an important part of achieving financial goals.
The most common responsible investing approaches are:
The environmental, social and governance factors of a company, both risks and opportunities, are systematically considered. This approach promotes industry best practices and ensures significant risks and concerns aren’t missed. It can be applied across all asset classes.
Exclusionary socially responsible investing (SRI)
Screens are applied to exclude specific companies from the portfolio, such as those involved in industries like tobacco, recreational cannabis, alcohol, gambling, adult entertainment and military contracting.
Impact (thematic) investing
The focus is on companies that support a specific environmental, social or governance theme, like water purification, solar power or gender diversity. Investment dollars are put toward the fund’s specific social or environmental goals, and as a result these funds may not be highly diversified.
Stewardship (engagement or proxy voting)
Stewardship efforts use investor influence to effect change in a company. Through direct or indirect communications with the company’s management team, or by using shareholder voting rights, this is one of the most powerful ways investors and asset managers can effect positive changes within companies and industries.
GLC’s responsible investing approach
We see responsible investing as improving the long-term returns of the funds we manage and adding value to our existing and disciplined investment process. That’s why all the funds GLC manages integrate ESG factors and actively engage with companies through direct or indirect communications and proxy voting. This includes core funds like equity, fixed income, and balanced funds, as well as alternative asset class and asset allocation funds - specialty-type funds where we see few money managers speak to a formalized approach to responsible investing.
Do good and feel good. You don’t have to pick and choose between strong long-term investment results and promoting positive change. You get both with GLC.
We believe considering the environmental, social and governance factors of a company can enhance the overall financial analysis we do with every investment decision – creating a more complete picture of the opportunities and risks associated with investing in a company.
We take our investment responsibilities very seriously, and every portfolio manager at GLC is encouraged to use their voting rights and access to company management to ask questions, get answers, and push for positive change.
Investing in best practices
GLC’s Responsible Investing Committee is made up of GLC’s senior leadership, including the President and Chief Investment Officer, compliance, communications and an ESG specialist. GLC’s Responsible Investing Committee meets regularly throughout the year with a focus on oversight of GLC’s responsible investing activities, tracking results, education, best practices and promoting positive change around the growing complexity and importance of ESG issues. GLC’s Responsible Investing Committee is responsible for formalizing GLC’s responsible investing policies and best practices.
Responsible investing policy
GLC has committed to enhancing our existing disciplined investment processes by layering considerations of sustainability in all portfolios, all the time. GLC screens all portfolio companies for environmental, social or governance risks or controversies. Download PDF
GLC’s engagement approach seeks to influence positive change through direct or indirect dialogue with companies, collaborative shareholder efforts, and when appropriate with public policymakers, including regulatory authorities. Download PDF
Proxy voting policy
GLC exercises shareholder voting rights supporting resolutions that sustainably maximize shareholder value and promote positive change. Download PDF
Knocking down four big myths of responsible investing
The trend toward responsible investing (RI) is growing. But can you mix morals with money? The answer is ‘Yes!’
Podcast: PSG’s commitment to responsible investing
Susan Spence, Vice-President of Portfolio Solutions Group discusses how PSG incorporates ESG factors as part of PSG’s decision making in managing the asset allocation funds.
GLC’s approach to responsible investing and ESG factors
Ron Hanson, President and CIO of GLC, discusses responsible investing and the integration of ESG factors into the selection and management of investments.
GLC signs United Nations-backed Principles for Responsible Investment
Our commitment to the UN PRI is the focus on promoting positive change surrounding the growing complexity and importance of ESG issues.
GLC becomes a member of Canada’s Responsible Investment Association
What’s key is the focus on promoting positive change surrounding the growing complexity and importance of ESG issues.
Investing for a better global financial system
GLC has partnered and joined organizations that further the goals of responsible investing, increase awareness and acceptance, and make a meaningful change toward a more positive, sustainable global financial system.