|Submission Date||Dec. 20, 2019|
Universite de Montreal
PA-10: Sustainable Investment
Total value of the investment pool:
Value of holdings in each of the following categories:
|Value of holdings|
|Sustainable industries (e.g., renewable energy or sustainable forestry)||0 US/Canadian $|
|Businesses selected for exemplary sustainability performance (e.g., using criteria specified in a sustainable investment policy)||0 US/Canadian $|
|Sustainability investment funds (e.g., a renewable energy or impact investment fund)||0 US/Canadian $|
|Community development financial institutions (CDFIs) or the equivalent||0 US/Canadian $|
|Socially responsible mutual funds with positive screens (or the equivalent)||0 US/Canadian $|
|Green revolving funds funded from the endowment||0 US/Canadian $|
A brief description of the companies, funds, and/or institutions referenced above:
Percentage of the institution's investment pool in positive sustainability investments:
Does the institution have a publicly available sustainable investment policy?:
A copy of the sustainable investment policy:
The sustainable investment policy:
The Responsible Investment Policy (RI Policy) requires the integration of ESG considerations into the investment manager selection and monitoring process for all asset classes. The RI Policy also requires our external listed equity and fixed income managers (active mandates) to report annually on ESG integration in the investment process.
When searching for, selecting and retaining external investment managers, the investment staff assesses their ESG stance and capabilities. The assessment is formalised: ESG-related questions are included in the initial due diligence questionnaire and during manager clarification meetings. When available, the ESG rankings provided by an investment consultant are considered during the selection process.
Does the institution use its sustainable investment policy to select and guide investment managers?:
A brief description of how the sustainable investment policy is applied:
Selection: with regard to RI, potential managers are evaluated based on two main criteria: PRI signatory status and ESG incorporation into the investment process. Generally, ESG-related questions are incorporated into the RFP or similar documents, and during the meetings with potential candidates. To determine the level of ESG incorporation into the investment process we evaluate:
• if not PRI signatory, adherence to similar guidelines, codes etc.
• if available, their PRI public transparency report
• responsible investment approach and policies
• method of ESG incorporation into investment and decision-making process
• proxy voting policy and disclosed proxy voting results
• internal ESG research
• ESG databases used (internal and external)
• dedicated ESG team/personnel and their role/interaction with the investment teams
• collaborative engagements
• standard ESG reporting practices.
ESG considerations are assigned a specific weighting in the investment manager evaluation. The ESG-related questions may vary across asset classes and investment style/strategies.
With respect to monitoring, the RI Policy explicitly requires listed equity and fixed income external managers (active mandates) to report annually on their ESG integration practices. The ESG performance and carbon footprint of listed equity mandates are measured annually. If necessary, the investment staff engage with the managers on the topic.
For the other asset classes, depending on the investment manager, the ESG monitoring process may consist of firm-wide responsible investment reports, formal written reports, bespoke reports, discussions of concrete examples/evidence of ESG approach, formal meetings on ESG issues.
In 2018, an external manager was selected to manage an emerging market sovereign debt mandate. The ESG criteria were included in the manager selection and appointment process. The selected manager is a PRI signatory, has an excellent ESG track record and incorporates ESG issues in the investment process by rewarding sustainable socio-economic policies and discriminating against unsustainable ones. Several governance and socio-political factors are explicitly accounted for in the investment process: scoring of fiscal policies and social dynamics, sustainability model partly based on social and governance factors, etc. Indexes like: TI Corruption Index, UN Human Development Index, WSJ/HF Index Economic Freedom, WEF Global Competitiveness, World Bank Ease of Doing Business are used to assess social and economic factors. The countries that do not live up to minimal ESG standards are excluded from the investment universe. The manager addresses ESG issues with policymakers (governments and central banks representatives).
Has the institution engaged in proxy voting, either by its CIR or other committee or through the use of guidelines, to promote sustainability during the previous three years?:
A copy of the proxy voting guidelines or proxy record:
A brief description of how managers are adhering to proxy voting guidelines:
The Management Committee adopted the proxy voting guidelines in September 2018 (not publically available). The endowment votes its own proxy according to its own guidelines through a service provider (since January 2019).
Has the institution filed or co-filed one or more shareholder resolutions that address sustainability or submitted one or more letters about social or environmental responsibility to a company in which it holds investments during the previous three years?:
Examples of how the institution has engaged with corporations in its portfolio about sustainability issues during the previous three years:
Does the institution participate in a public divestment effort and/or have a publicly available investment policy with negative screens?:
A brief description of the divestment effort or negative screens and how they have been implemented:
Approximate percentage of endowment that the divestment effort and/or negative screens apply to:
Does the institution engage in policy advocacy by participating in investor networks and/or engage in inter-organizational collaborations to share best practices?:
A brief description of the investor networks and/or collaborations:
The endowment signed the Principles for Responsible Investment PRI in January 2017.
“As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time).
We also recognise that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:
Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.
The endowment has submitted its first transparency report to the PRI in 2019.
The endowment participated in two collaborative initiatives since becoming a PRI signatory:
• In 2017, the endowment signed the Investment Statement in Support of the Report 'Combatting Child Labour in Cocoa' - Investors Expectations and Corporate Good Practice.
• In 2018, the endowment signed the '2018 Global Investor Statement to Governments on Climate Change'.
The endowment is an active member of the Quebec PRI Network, a group of approximately 50 PRI signatories based in Quebec or having offices in Quebec. The group's objective is to bring together signatories to collaborate locally and promote responsible investment and the PRI within the local investment community.
A member of the investment staff chairs the Quebec Network Advisory Committee since January 2018. Also, a member of the investment staff was a member of the jury that awarded the 2017 and 2018 Finance and Sustainability Initiative (FSI)-PRI Scholarship for Best Research on Responsible Investment. https://www.finance-montreal.com/initiative-pour-la-finance-durable/bourse-ifd-pri/ (The FSI-PRI Competition and Scholarship was governed by a steering committee composed of members of the FSI and the PRI Quebec Network).
Website URL where information about the institution’s sustainable investment efforts is available:
Additional documentation to support the submission:
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