The Purpose Revolution – The Friedman Doctrine Is Out; the Stakeholder Doctrine Is In

A revolution happened today – a revolution in how business leaders define their purpose.

In 1970, the economist Milton Friedman wrote: “There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” Friedman went even further by calling social responsibility a “fundamentally subversive doctrine.”

In short, the Friedman Doctrine stipulated that companies should focus solely on maximizing profits while obeying the law. For decades, this thinking has provided the theoretical foundations of how business gets done.

Until now.

Today, the US-based Business Roundtable of 181 CEOs announced that it has abandoned the Friedman Doctrine and replaced it with a new vision that focuses on a broader set of stakeholders including customers, workers, suppliers and communities in addition to shareholders.

The powerful group – which includes the CEOs of Apple, Amazon , Goldman Sachs, Bank of America, and ExxonMobil among others – now says companies should “protect the environment” and “foster diversity and inclusion, dignity and respect” for employees while also delivering long-term profits for shareholders.

The demise of the Friedman Doctrine marks a fundamental shift in how business leaders understand the purpose of a corporation. No longer is social responsibility a “subversive doctrine” – rather, it is part of the very purpose of a corporation, according to those who run 181 of the largest corporations in America.

Responsible Investors have been incorporating environmental, social and governance (ESG) issues into their investment decisions for years because they recognize that well-governed companies with strong performance and social and environmental metrics are likely to be better long-term investments. The Business Roundtable has redefined the purpose of a corporation in line with this thinking. This announcement provides leverage for responsible investors who engage with companies on ESG issues.

The Friedman Doctrine is out, and the Stakeholder Doctrine is in. We would love to see a similar statement from the Business Council of Canada (BCC). We will be reaching out to the BCC to start a dialogue.

Together We Must: Takeaways from the 2019 RIA Conference

Excitement. Urgency. Responsibility. This is what you felt if you attended the 2019 RIA Conference in Montréal on April 24th and 25th.

Roger Beauchemin, CEO of Addenda Capital and Vice-chair of the RIA’s Board of Directors, put it very simply in his opening address; the growing attendance, with a record 570 registrants and over 100 more on the waiting list, is a testament to how salient responsible investing has become – not only for financial market participants in Canada, but for us all. “I hope that you will leave this conference with a renewed sense of energy and determination to change the world, because together we can, and honestly, together we must.”

From climate change governance and women in leadership to artificial intelligence and cannabis, the two-day bilingual event had something for everyone. If you missed out on the largest ESG event in Canada, here is a look at what took place throughout the plenary sessions.

2019 RIA Conference Day 1

Artificial Intelligence: Responsible Disruption?

It seems as though new applications for artificial intelligence (AI) are rolling out on a daily basis, transforming our work tasks and presenting us with an abundance of questions. How do we ensure that data is used responsibly? How will AI affect our workforce, and what does a socially inclusive transition look like? Chadi Habib, Executive Vice President of Information Technology at Desjardins Group, joined David Beauchemin, Cloud Lead for Eastern Canada at Google, to demystify what AI really means and where it’s headed. Whether we like it or not, the revolution is here: an estimated 75% of business applications will use AI by 2021.

However, Mr. Beauchemin emphasized that just because we can apply it, doesn’t mean we should – Google follows a principled approach that limits AI to socially beneficial applications, and avoids those that cause harm or infringe on international and human rights.

Keynote – The ‘S’ in ESG: The Role of Investors in Driving Respect for Human Rights

Attendees had the privilege of hearing from Professor John Ruggie of Harvard University, architect of the UN Global Compact and the UN Guiding Principles for Business and Human Rights, in a captivating keynote address. Professor Ruggie touched on three main points: how critically important ESG has become in our extraordinarily turbulent world economy, the urgent need to drive ESG further into the mainstream, and how a more scrupulous look at the human dimension of the ‘S’ can strengthen consistency of data and confidence in ESG overall. “You cannot fix a problem with the tools that created it. We need new tools – and ESG is such a tool.”

SDGs In Action: How Are We Going To Achieve The Sustainable Development Goals?

Experts from Unilever, CN Rail, Mercy Investments and Aviso Wealth tackled the question: how can investors and companies work together to achieve the SDGs? Moderator Fred Pinto, Senior Vice President and Head of Asset Management at Aviso Wealth, set the stage with the idea that using the SDGs as a common goal will allow companies to create a framework for building a more sustainable future through new products and services. The benefit is to everyone.

The panel explored the idea that it’s not only about achieving the SDGs but also measuring businesses performance within the framework of the SDGs. If the SDGs are the world map of the future of human prosperity, health and well-being, gender equality, environmental resilience, and financial security, businesses need to unlock ways to succeed within them.

Conscious Capitalism Keynote Address

While capitalism remains the best system we’ve ever known for creating prosperity, the harsh reality is that “capitalism is broken”. Negative externalities are difficult to swallow, but can no longer be ignored. In her afternoon keynote address, Erika Karp, Founder and CEO of Cornerstone Capital, grounded the audience with a well-needed conversation about being uncomfortable.

Karp is undoubtedly one of the few people capable of delivering a speech with the perfect balance of candor and light-heartedness. “There are a lot of things that we are very uncomfortable with,” said Karp, referring to the many environmental and social challenges we face today. “The key is to grab onto those things and do something about it”. Fortunately, we’re already seeing strong momentum from different corners of the sustainable finance world: widespread adoption of ESG disclosure standards, social media driving unprecedented transparency and high-speed information exchange, the emergence of powerful data processing and improved data quality, and the largest wealth transfer into the hands of the most socially conscious and purpose-driven generation there has ever been. And this is just the beginning.

Climate Change Governance

Led by Sophie Lemieux, Vice President of Institutional Markets at Fiera Capital, the last session of the day focused on climate change’s emergence as a major corporate governance issue for companies. The onus, agreed the panel, which included representatives of pension funds CDPQ and Bâtirente, falls onto board members. They pointed to how tools offer only guidelines, not rules, and it is ultimately up to board members to address climate change risks.

Milestones, like COP21, can be used to guide climate change planning for boards, too, though regulation is needed to create mandatory climate change disclosures. Only then can investors and companies conduct proper analysis and move forward systematically.

2019 RIA Conference Day 2

Before diving into another full day of engaging discussions and busy networking breaks, the crowd received some encouraging opening remarks from Luc Fortin, President and CEO of the Montréal Exchange (MX) and Global Head of Trading with TMX Group. Having signed on to the United Nations Sustainable Stock Exchanges (SSE) initiative in February of this year, TMX has shown leadership in promoting sustainability performance and transparency in capital markets.

Education and industry dialogue are top priorities, which is why Mr. Fortin was pleased to announce that TMX had just joined the RIA as its newest Associate Member. “For TMX, collaboration is key and it’s the ultimate enabler of success,” said Mr. Fortin. “Our clients and stakeholders are our trusted partners in making Canada’s markets stronger and more resilient.”

The Future of Sustainable Finance in Canada: A Discussion with the Expert Panel

When the Expert Panel on Sustainable Finance set out to engage a multitude of stakeholders on low carbon, clean economic growth in Canada, they expected that not everyone would want to participate. Turns out, Canadians are even more generous than previously thought. Kim Thomassin, Executive Vice-President of Legal Affairs and Secretariat at la Caisse de dépôt et placement du Québec (CDPQ), and Tiff Macklem, Dean of the University of Toronto’s Rotman School of Management and ex-senior deputy governor of the Bank of Canada, spoke with Roger Beauchemin, CEO of Addenda Capital, about the Panel’s comprehensive consultation and the challenges to Canada’s low-carbon transition.

In general, the Canadian public has a hard time seeing sustainability as a financial opportunity, and nearly all roundtable participants brought up the data issues in assessing climate risks. A public-private partnership focused on collecting climate information and developing analytical tools may be part of the solution. The Panel will release their much anticipated final report and recommendations in May.

Going Long on ESG: What’s the State of Play, and Where are we Heading?

Many see Michael Jantzi, ESG pioneer and CEO of Sustainalytics, as a community leader within the responsible investment industry. In a compelling speech on the current and future state of ESG, he did exactly what a community leader would do: acknowledge the progress and confront the issues. On the positive side, the ESG long game is probably here to stay. A strong foundation, built by others many decades ago, has translated into amazing growth opportunities.

At the same time, with more opportunity comes more responsibility. “ESG, to this point in time, hasn’t been looked at as closely as it’s going to be looked at,” cautioned Jantzi. The more serious issues, however, bubble beneath the surface. “We are seeing a crumbling of civility in discourse,” said Jantzi, referring to increasing politicization and polarization of ESG issues among general populations. “If you believe that [these issues] are important to non-politicize, than we have to get involved.”

Managing Human Capital To Enhance Shareholder Value

A company is only as good as its people. So how can investors and companies work together to effectively manage people and create more value for employees, management and shareholders? Moderator Olivier Gamache, President of Groupe Investissement Responsable (GIR), was joined by panellists Armelle de Vienne, Senior Associate, ESG analysis at Rockefeller Capital Management, Valérie Cecchini, Vice President and Portfolio Manager at Mackenzie Investments, and Erica Coulombe, Associate at Millani, to discuss the many forms of managing human capital, including hiring practices, employee training, employee well-being and employee retention.

The discussion covered how managing human capital is not a singular challenge, especially when you consider differences across industries and regions. These complexities make it difficult for some companies to create a comprehensive strategy and report results precisely. But the conclusion of the discussion was clear: there is a correlation between effective human capital management and financial performance.

Women In Leadership: How Can Companies And Investors Accelerate Progress On Gender Parity?

Gender diversity at the board level has stalled in Canada and elsewhere. It’s an ESG issue that investors and companies are able to address very effectively, improving leadership and diversity at the highest rungs of the corporate ladder as a result. So, how can we accelerate progress? According to panellists Sherazad Adib, Senior Director at Catalyst, Tina Debos, Senior Consultant, Diversity and Inclusion at Bell, Vicki Bakhshi, Director, Governance and Sustainable Investment at BMO GAM, and moderator Milla Craig, President and CEO of Millani, investors have several tools at their disposal, including:

  • Introducing board term limits to encourage change
  • More engagement from investors to encourage company-level diversity goals
  • Creating mutual funds that focus on gender diversity
  • Updating legislation that reflects the perspective of investors and companies today
  • Broadening the qualifications for board positions
  • And better measurement and disclosure of diversity and inclusion

The Alpha And Beta Of ESG Investing

According to Thierry Roncalli, Head of Quantitative Research at Amundi Asset Management, the time for investors to act is now. We’re facing global issues that challenge our economic model, like climate change, and while many investors have welcomed ESG into their investment strategy, others remain hesitant. The most common question for laggards is perhaps the most obvious: what is the link between ESG and performance?

Roncalli suggests the results are mixed. Up until 2014, research showed that ESG may impede performance but more recent data is much more positive, showing a correlation between long term value and positive ESG ratings. Part of the problem is that ESG scores are relative and not absolute, so when comparing them to other indicators, like credit score, they’re less consistent.

When investors consider these additional ESG insights, like extra-financial risk and risk management in the long term, there is a strong connection between ESG and performance. Roncalli’s concluding message to an audience of several hundred investment professionals: “If we move collectively, we can see that we can move the market.”

This is a summary of the 2019 RIA Conference plenary sessions. Conference slide decks and more information on select sessions can be found below:

Next year’s RIA Conference will be held in Toronto on June 8-9th. Subscribe here for updates on registration, speakers and more! Subscribe now.

Disclaimer
The views and opinions expressed in this article reflect those of the speakers and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the speakers. This article is intended as general information.

 

The Biggest Challenge to RI Adoption? It Might Be Us

Better understanding of RI and its benefits starts by changing how we talk about it.

It’s tempting to look at the rapid uptake in Responsible Investing (RI) solutions and conclude we’re doing everything right. RI assets in Canada are growing – now over $2T, up 42% the past two years. RI-focused mutual fund assets are up 34% and have grown to over $11B. And RI now represents just over half of the Canadian investment industry – up from 38% two years ago. This is just some of the exceptionally good news you can find in the latest RI Trends Report.

If we, as RI practitioners, all sat back and did nothing, it seems the RI wave would continue to grow. But sitting passively by is not in our nature or interest. And it’s a good thing, too. Because for all the success we’ve witnessed around the adoption of RI, the persistent challenges to more widespread adoption – the perception of underperformance, for example – remain squarely in our path. Until we find a way to resolve those challenges we will not reach RI’s true potential.

So how do take RI to the next level?

Let’s start by looking at the difference between institutional and retail channels in the adoption of RI. In the institutional space, which typical leads the retail trend, RI is humming along nicely. Institutional investors appear unmoved by the RI performance myth. In fact, the RI Trends Report survey found that the managers of pensions and institutional money favour RI for its risk benefits, return potential and overall fiduciary duty.

In the retail space, the growth trend has also been strong, albeit from a lower base. What’s concerning here though is the apparent disconnect between retail investors (who have made it clear they not only support companies that consider ESG factors in their operations, but also fully expect their advisors to incorporate ESG considerations into their investment portfolios), and their advisors. According Allianz Global Investors, only 14% of advisors proactively introduce RI into their client conversations.

When asked about the reluctance to incorporate RI into their practices, advisors trot out the usual suspects: performance concerns, lack of solution breadth and the assumption that since their clients aren’t asking for RI specifically, there must be a lack of interest.  We know all this to be patently untrue. And though we’ve banged our heads against the wall for years trying to overturn these perceptions with clear, seemingly irrefutable evidence, it doesn’t seem to matter.

There may, however, be another reason for the reticence, one we hear with increasing frequency. Despite the obvious potential for business growth many advisors tell us they don’t introduce RI because they simply don’t know how to talk about it. And why is that? It might be because we, the providers and promoters of RI solutions, aren’t helping them.

It all comes down to how we talk about it. Typically, we position RI one of two ways: we either lead with our values and present RI as the “right thing to do”. Or we lead with facts and argue that RI is a better way to invest. Both approaches have the potential to inhibit rather than enhance adoption.

When we lead with values, we’re asking an advisor or investor to believe in the same things we do. What are the odds of that? Like people everywhere, advisors and investors come to the table with deeply ingrained beliefs. And if those beliefs are not aligned with the values of RI, there is little chance of changing them – at least in the short term.

When we lead with the facts of RI, we run the potential for even greater disassociation. RI performance data may resonate in the institutional world, but if many retail advisors truly believe RI underperforms, hitting them over the head with our facts is unlikely to change their minds.  Advisors who have invested successfully for their clients (and after the bull run we’ve had that’s probably everyone) are unlikely to respond well to the message that they’re doing it all wrong.

So what to do?

The solution to this dilemma lies in how we frame the RI conversation. Instead of talking about what RI is, or how it works, wouldn’t it better to open the conversation with a discussion of what RI can actually do for investors? Talking about RI this way addresses what matters most – meeting investor needs.

A needs-based conversation puts advisors on much more solid ground when discussing RI as well. What advisor hasn’t, for example, talked to investors about the need to manage risk? Or uncover new opportunities for growth? These are universal needs that can be met in very distinct ways through RI solutions. There are also burgeoning investor needs such as the desire to make a positive impact beyond investment returns that only RI solutions can meet.

Framing the conversation in a manner that puts the client’s needs first also sets the advisor up to demonstrate real value, a critical consideration in a post-CRM2 world.

Ultimately, the key to making that big RI breakthrough we all want is about making the right connection with our audience. We’ve achieved a significant degree of success talking about RI the way we always have. Is that enough to keep RI growing? Or could changing the conversation lead to greater adoption?

By reframing our discussions around the spectrum of needs that RI solutions are uniquely structured to meet, we’ll make it easier for advisors to talk about RI and stand a much better chance of having both advisors and investors overcome the perceptions that currently prevent more widespread adoption.

Disclaimer
The views expressed are those of the author and not necessarily those of NEI Investments.
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Case Study: Getting to a 100% Impact Portfolio

In 2016 Inspirit Foundation – a public foundation working to promote inclusion and pluralism through media and arts, support for young change leaders and impact investing – committed to a 100% impact portfolio to leverage our full asset base for financial returns and positive social and environmental impact.

We formalized this commitment in our Investment Policy Statement (IPS), which states that Inspirit’s investment decisions must be guided by three principles:

  1. Risk-adjusted financial performance
  2. Movement toward a low carbon portfolio
  3. Positive impact through alignment with Inspirit’s organizational vision

By 2020, Inspirit is expected to meet our goals for a 100% impact portfolio. Here is a major chapter of the narrative of how we are getting there:

Conducting the initial audit

When we committed to a 100% impact portfolio, most of Inspirit’s portfolio was in the public market being managed by three investment managers with balanced mandates who were tasked with investing across the asset classes of fixed income, Canadian equities, and global equities. In order to analyze the performance of our investments, we conducted an audit of our portfolio based on our updated IPS.

Measuring performance indicators

Then, we enlisted the support of our investment consultant, Proteus, to assess financial performance using four main indicators: net returns vs. benchmark, information ratio, up-market capture ratio, and down-market capture ratio. We also subscribed to research offered by MSCI to understand the carbon and impact performance of our portfolio. This research allows us to measure our portfolio’s exposure to carbon emissions. Our portfolio’s positive impact is assessed through Environment/Social/Governance (ESG) scores and revenue from products and services that contribute to the United Nation’s Sustainable Development Goals (SDGs).

Benchmarking performance indicators

Next, we benchmarked the financial, carbon, and impact performance of our portfolio against a traditional benchmark, which primarily consisted of the FTSE TMX Universe Bond, S&P/TSX Composite, and MSCI ACWI (CAD). For aspirational purposes, we also benchmarked our portfolio’s performance against the MSCI Sustainable Impact Index, a benchmark with strong financial results, a low carbon footprint, holdings that are top performers along ESG metrics, and a selection methodology that identifies holdings deriving 50%+ of their revenues from products and services contributing to the SDGs.

Finding the right expertise

The analysis indicated our portfolio had room for improvement on financial, carbon, and impact performance. In order to improve portfolio performance, we committed to transitioning from a balanced portfolio approach to a specialized asset class style. Data demonstrated to us clearly that it is rare for investment managers to consistently sustain outperformance across multiple asset classes. We determined we needed to transition Inspirit’s portfolio management from three investment managers with balanced mandates investing across asset classes to investment managers each with specialized mandates to invest in specific asset classes.

In May 2018, Inspirit released a Request for Statement of Interest and Qualifications inviting submissions from investment managers to help us satisfy the goals in our IPS within the fixed income asset class. We started our transition to a specialized asset class investment approach with fixed income due to underperformance of that asset class within our portfolio compared to our benchmark. We received a high number of quality submissions, which we scored based on five main categories:

  1. Investment firm and their commitment to diversity, equity, and inclusion – 20% scoring weight
  2. Proposed product overview, thesis, and fees – 20% scoring weight
  3. Proposed product’s financial performance – 30% scoring weight
  4. Proposed product’s carbon performance – 5% scoring weight
  5. Proposed product’s impact performance – 25% scoring weight

After reviewing and scoring all the submissions, we conducted two rounds of interviews before coming to a final decision. In the end, we were pleased to select Addenda Capital as our new manager and allocate our entire public fixed income portion of our portfolio to their Impact Fixed Income Fund.

With our investment in Addenda’s Impact Fixed Income Fund, we now have over 85% of our portfolio invested in impact investments. These investments are top performers along environmental, social, and governance metrics and ideally also earn at least 50% of their revenue by contributing to the United Nations Sustainable Development Goals.

We plan to continue to transition our portfolio from one with traditional investments to one entirely composed of impact investments, and also one with a balanced investment approach to one with a specialized asset class investment expertise. The next step is a Request for Statement of Interest and Qualifications for a global equities manager, followed by a search for a Canadian equities manager that can satisfy the financial, carbon, and impact goals outlined in our IPS. We expect to fully transition to a 100% impact portfolio in 2020.

Please follow our progress here.

Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Navigating the Responsible Investment Landscape

Investors are faced with many options when they want to invest responsibly. To ensure they get the results they’re after, investors must first sort through the principles that support each option, starting with what ‘responsibly’ means.

In the following paragraphs, I will outline two very different understandings – first as practiced by investment analysts and second according to investor values or behavior – and then show where these two theoretical poles are beginning to merge.

Investment firms which manage portfolios on behalf of another party (including mutual funds and exchange traded funds [ETFs]) are amongst the largest investors and many are signatories to the United Nations backed Principles for Responsible Investment (PRI), based in London, England. The PRI defines ‘responsible investment’ as the integration of environmental, social and governance (ESG) factors into the analysis and selection of investments, and into ownership activities such as engagement with management and the voting of proxies at shareholder meetings.

Consistent with Modern Portfolio Theory (MPT), which among other things guides investors to broadly diversified portfolios, ESG integration does not limit the types of investments considered. Rather, it mandates consideration of the impact that material ESG issues might have on the risk and return profile of each investment – over and above what may be available from standard financial statements. Determining which ESG issues are material to a company and how to measure those issues is an emerging area of interest that has recently received a lot of high-profile support, including from Mark Carney (Governor, Bank of England, and formerly Bank of Canada) and Michael Bloomberg (former mayor of New York).

The benefit to analysts of integrating ESG factors is the potential discovery of hidden risks that are not apparent on regular financial statements and a better chance at outperformance. The benefit to society (i.e. the reason this is considered ‘responsible’) comes from public companies paying attention to the ESG issues that are important to financial analysts, disclosing and reporting on those issues publicly, and in many cases, changing their corporate behaviour. Measurement and transparency lead to better ESG outcomes.

ESG integration also requires consideration of material ESG factors on the ownership side of investing. By voting on shareholder proposals that seek better ESG outcomes, investors can further improve the ESG practices of public corporations. Large investors may even have a chance to engage directly with a company’s management on environmental, social or governance issues – a ‘behind the scenes’ opportunity which can advance corporate ESG practices considerably. Active ownership leads to better ESG outcomes.

This is only one side of the conversation. Notably, PRI’s definition of ‘responsible investment’ does not involve personal values or the screening of investments for particular trending attributes such as high carbon oil (out); low carbon wind or solar power (in); tobacco (out) and strong diversity policies (in). In contrast, many investors have strong personal views about these and other issues, and want their investment portfolios to reflect their individual values. Fortunately for these investors, there are many mutual funds and ETFs willing to accommodate their principles.

Screening of portfolios for particular attributes has a long history, rooted many decades ago in the exclusion of select stocks by certain religious organizations that were seen as anathema to their values. Eventually, the practice evolved into what is often called ‘socially responsible investing’ (SRI), ‘ethical investing’ or when tilted towards environmental issues, ‘green investing.’ It is based upon personal values and may be different for each investor. Screening may lead to a portfolio that is less diversified than MPT prescribes, but in practice, modest amounts of screening may have little impact, especially over the long term, and could have offsetting or larger benefits.

Behavioral finance theory shows that control over one’s choices instills greater confidence in the outcomes, which may result in a higher likelihood of staying invested during volatile markets. As well, investing according to commonly held values, such as concern about global warming, can send an important social signal. People often chat at social gatherings about their investments, sharing their personal perspective and affirming mutually held values. As our societal values evolve, so do the regulatory and legal frameworks that mandate (hopefully) better ESG practices. Corporations pay attention to their social licence and to the values of their consumers, and tailor their ESG practices accordingly.

Notice that the processes for the analysis-based ESG integration and the behavior-based portfolio screening are quite different. Just as neoclassical finance and behavioral finance co-exist and explain different aspects of the stock market, so to do they explain different aspects of ‘responsible investment.’ With the two different investment approaches outlined, we can now explore where they are starting to overlap in practice.

Some studies show that companies which performed well or showed improving ESG metrics often outperformed or had lower risk than their peers. While past results are not necessarily indicative of future performance, the studies do encourage further consideration and research. For example, another group of researchers is using this type of data to propose inclusion of ESG as a systemic factor within MPT – showing a robust theoretical model that ESG factors are generally underpriced in the market and that they offer higher returns and/or lower risk.

Many mutual funds and ETFs offer broad screens of ESG factors which align with commonly held values – a happy convergence of behaviour and emerging financial theory – and they may use active ESG integration as well.

While this article has focused on investment vehicles such as mutual funds and ETFs, many investors also hold stocks and bonds directly. Investors should discuss with their advisor how to best meet their responsible investment goals. Do they want to invest according to their values or follow MPT and rely on ESG integration, or use a blend of both? If values are part of the mix, it is important to ask if the investment performance of the screen is supported by research or if some diversification being sacrificed? Is there capacity to integrate ESG considerations into the analysis of stocks and voting of proxies, or should they rely on the expertise of a mutual fund or ETF?

Responsible investing is an evolving field, both in practice and in the research that supports those practices. It has a critical part to play in improving corporate transparency and environmental, social and governance (ESG) outcomes, and investors have an important role in ensuring their money contributes to these responsible results.

Disclaimer
The information contained herein is for general information purposes only and is not intended to provide financial, legal, accounting or tax advice to be relied on without an individual first consulting with their financial advisor to ensure the information is appropriate for their individual circumstances.
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Case Study: 4 Lessons from a Foundation’s (Ongoing) Journey to a 100% Responsible Portfolio

As many other foundations do, the J.W. McConnell Family Foundation acts as prudent steward of its endowment to ensure that we can meet our granting priorities.

Established in 1937, our mission is to support Canadians in building a more inclusive, innovative, sustainable and resilient society. We use the lens of systems transformation — changing policies and institutional culture in order to address the root causes of societal challenges – to guide our strategy and investments. The Foundation has an endowment of $650M managed in perpetuity with current yearly charitable disbursements of about 4%.

In 2007, we also recognized that if we are to contribute meaningfully to pervasive social and environmental challenges, we will need to harness the full range of our unique assets, capabilities, and positioning, and we need to work collaboratively within and across sectors.

Creating an Impact Portfolio

We began our exploration of impact investing, which was an opportunity to attract private capital to scale impact, and complement our philanthropic objectives in the community sector. At the Board of Trustee’s directive, we started with an allocation of 5% to impact investing which subsequently became 10%.

Over the last decade, we have made impact investments across a range of asset classes (including public equities, private equity, debt instruments and guarantees) and sectors (including sustainable food, affordable housing, arts and culture, and indigenous economic development). Our impact investments have helped to advance the Foundation’s mission in at least 3 ways:

1. Target investments that advance our program objectives where debt, equity or hybrid investments can initiate or scale solutions that philanthropic dollars cannot;
2. Increase community effectiveness by enabling new financing mechanisms for charities and non-profits; and
3. Stimulate the development of a social finance marketplace through co-investments in new financial models and with like-minded investors.

Examples of the above include Renewal Funds which invests early stage in social impact companies, Community Forward Fund which provides lending capital to small and medium size Canadian charities and non-profits, and CoPower which enables green bond access for individuals, using the proceeds to invest in clean energy and energy efficiency projects.

 The J.W. McConnell Family Foundation’s Portfolio*
Total AUM: $651M

  • % Portfolio with targeted negative screen: 100%
  • % Portfolio with other RI strategies: 70%
  • Total Impact Investments: $70M
  • 26% with concessionary returns
  • 74% with market-rate returns

* Data from May 31, 2018

Growing our Commitments to Impact

As we grew our impact investing portfolio, we realized that the opportunity to harness the power of capital to advance social change was broader than we initially envisioned. A first expansion of our boundaries took place when we invested in NEI, which gave us a flavour of how you can be intentionally impactful when investing in public equity strategies. Later, we were involved through granting and investing in an Indigenous on-reserve housing project which in its pathway to scale anticipates greater involvement of the “mainstream” capital market actors, and not just foundations and governments.

This and other examples led to the redefinition of our internal practice as Solutions Finance – which we define as an integrated approach to deploying financial capital and adapting financial models to catalyze, sustain and scale systems transformation. This reframing recognizes our role as an asset owner with a diversified portfolio that can be aligned with our impact objectives, our role as a convener to encourage multi-sector collaborations, and our role as a grantmaker to support systems innovation.

A subsequent phase of our work began with a commitment to have 100% of our assets managed responsibly over the coming years. As the Canadian market evolves, with more capital being intentionally directed in this way from institutional and retail investors, and greater availability of products, we are optimistic about the opportunities to engage in this area. As we reflect on our journey, we would like to highlight four lessons from our experience that may be relevant to asset owners that already have, or aspire to, align and deploy their assets for impact.

Lesson 1 – Recognize that all of our investments have impact

An important realization for any asset owner is that all investments in your portfolio can be steered to have social and environmental impact. Although we do not yet have the required suite of tools to fully account for this, including impact measurement standards, acknowledging this reality has changed the way we view our goals and opportunities to transform systems with finance and investments. It encouraged us to use the full range of assets that we bring to the problems we seek to solve, which was important since many of the ‘wicked problems’ that exist require a range of solutions and various forms of capital along the way.

Lesson 2 – Not every investment is an impact investment

Impact investments hold “intentionality” at the core of their strategy. They are meant to direct capital to solve targeted social and environmental challenges. However, it should be obvious that not every investment can lend itself to this approach. That said, we can insist on parameters that ensure all our investments meet a minimum standard of reducing negative impacts while also progressively increasing good environmental, social, governance, corporate and general sustainability practices. For example, we can actively participate in shareholder activism with specific companies that are influential in the sectors in which we have granting programs, or in a less engaged manner require specific disclosures or increased transparency from our managers. In this way, our responsible and sustainable investment practices also contribute to improving broader social and environmental outcomes in complementary ways.

Lesson 3 – Be clear about what you are optimizing for

We deploy a range of complementary approaches across our portfolio, For example, we direct certain impact investment allocations for credit enhancement or risk mitigation for nonprofits and charities, while we direct other parts of the portfolio to scale organizations that have proven approaches and evidence in a specific area. As a foundation, we are unique in our ability to take risk through blended structures that optimize for both impact returns and financial returns; however, as we seek to maximize our impact, we will not sacrifice financial returns where it is not a fit. Evidence from us and others is that trade-off between financial and impact returns is not inherent to every impact investment; it all depends on your goals, preferences, and flexibility.

Lesson 4 – Collective action stimulates innovation and enhances results

Many private and community foundations, as well as institutional and private investors, are also committing significant dollars and time to uncovering and supporting community-based initiatives that can harness these types of capital to deliver positive impact. Our experience has shown that these collaborations are necessary to support product issuers and community initiatives to deliver on their objectives – whether it is sharing information, tools, training, networks or bringing to bear other institutional assets. Collaboration is also important as we think about designing and resourcing interventions at scale if we are to achieve the Sustainable Development Goals (SDGs). We will continue to advance in this way, and hope that many other investors will join as we work collectively towards the wellbeing of our societies and our planet.

Sources:

  • https://mcconnellfoundation.ca/introducing-solutions-finance-a-new-vision-for-our-work/
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Understanding Material Carbon Risks in Portfolios

There is growing recognition within the investment community that climate change poses material risks to investments.

Investors are eager to understand and address material carbon risks in their portfolios not only to achieve better performance of their investments, but also to take advantage of opportunities arising from the shift to a low-carbon economy.

In addition, the Task Force on Climate-related Financial Disclosures (TCFD) and other regulatory bodies have emphasized to investors the importance of disclosing climate-related risk in portfolios and called for a focused approach to manage these risks.

Understanding climate risk in portfolios starts with investors asking two important questions. What climate risks is the portfolio exposed to? And what is the degree to which the companies in the portfolio are exposed to these risks?

Applying a materiality lens to take a closer look at investee companies reveals two types climate risks – transition risks (or carbon risks) and physical climate risks. Depending on the industry and geography, both risks could have a significant impact on a company’s business and therefore, increase portfolio risk or decrease portfolio performance.

The need to reduce man-made greenhouse gas emissions and the shift to a low-carbon economy has the potential to disrupt many established practices, processes, operations and products of companies. These risks, commonly referred to as transition risks, are spurred by regulation, customer preferences and low-carbon technology alternatives.

Physical climate risk such as threats to businesses due to heat stress, extreme rainfall, drought, storms, sea-level rise and wildfires and second-order effects such as ecosystem collapse, hunger, disease and mass migration would have serious impacts on companies depending on the degree to which they are exposed to these risks.

One could conclude that physical climate risk would continue to increase if sweeping measures to reduce atmospheric greenhouse gases are not adopted. Drastic greenhouse gas reduction measures would invariably increase the transition risks on companies as they would have to adopt and survive under these constraints.

The degree to which investee companies are impacted by transition risk requires an understanding of how these companies are exposed to these risks and how they are managing them. Assessing a company’s exposure to transition risks leads to the conclusion that different industries are exposed to transition risks differently. In addition, within an industry, companies have varying degrees of exposure to transition risk. For example, an oil and gas exploration company has significantly higher transition risk than a healthcare service provider.

This has significant implications on how investment portfolios are constructed. A sectoral view of a portfolio reveals a higher portfolio weight in high transition risk industries would inherently make the portfolio risky. This also has implications on portfolio types. An energy sector portfolio will inherently have significantly higher carbon risks than a healthcare sector portfolio. Interestingly, a well-diversified portfolio with exposure to all the sectors would have lower carbon risk as low risk sectors such as healthcare and information technology (IT) would balance out higher carbon risks from energy and utilities sectors. Another notable point would be the impact of portfolio styles, such as value or growth, on carbon risk. Typically, value portfolios tend to invest in energy and utility sectors which have high carbon risk, while growth portfolios tend to have high exposure to low carbon risk sectors such as IT.

In conclusion, both physical climate risks and transition risks will impact portfolio returns through their holdings and a careful and deliberate analysis is needed. Interestingly, these two risks have somewhat of an inverse relationship – an increase in transition risk would result in lower physical climate risk. Understanding the degree to which sectors and companies are exposed to these risks is paramount for addressing climate risks in portfolios. This would determine not only the type of holdings within a portfolio, but also portfolio type and style.

Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

RI 101: Four Ways to Spot a Responsible Investment

More and more investors are recognizing the personal and financial benefits of responsible investing (RI). Globally, RI accounts for over US$20 trillion in assets; in Canada, RI assets are well over $1 trillion.1

With steadily growing demand for responsible investments, the mutual fund industry has answered with a wide array of options. Here are some features to consider when evaluating RI funds.

1. Wide-Ranging ESG Criteria

An investment selection process that places significant emphasis on environmental, social and governance (ESG) factors is the primary feature that distinguishes RI from conventional approaches. ESG factors fall under a wide range of categories, including:

Corporate governance

  • Is there a majority of independent directors?
  • Does the company have a code of conduct and business ethics?

Sustainable products

  • Do the company’s main products or services contribute to, or detract from, quality of life?
  • Is the company developing products that advance or detract from sustainability?

Employee relations

  • Does the company have a history of good or poor employee relations?
  • Does the company contribute to employee health and retirement plans?

Employee diversity

  • Does the company have a commitment to increasing gender and ethnic diversity?
  • How diverse are the board and senior management?

Community relations

  • Are employees compensated for volunteer work?
  • Has the company been involved in disputes with the community?

Human rights practices

  • Does the board have a human rights policy?
  • Does the company monitor working conditions at supplier facilities?

Environmental performance

  • How does the company’s environmental performance compare to competitors?
  • Does the company provide regular information on environmental performance?

Different investment funds will hold companies to different standards when it comes to ESG performance. The stricter the standard, the more responsible the fund.

2. ESG Screens

Screening for ESG factors generally takes two forms: negative and positive. A negative screen eliminates companies that fail to meet the fund manager’s ESG criteria. This often includes companies with major interests in:

  • Tobacco
  • Nuclear power
  • Military weapons
  • Adult entertainment
  • Gambling

A positive screen goes one step further by seeking out companies that actively pursue an ESG agenda, such as clean energy development.

3. Shareholder Engagement

A company with a clean bill of ESG health may make it into an RI fund, but what happens if, over time, it fails to maintain high ESG standards?

This is where shareholder engagement can play a role. This involves using the fund’s leverage and influence as shareholder to call company boards and management to account. To increase its effectiveness, shareholder engagement is often undertaken by a group of likeminded shareholders.

Shareholder engagement can also be used to help ensure companies in the portfolio are dealing with new and emerging ESG risks. For example, two types of risk have recently generated significant concern among investors, communities and environmental regulators:

  1. Environmental risks associated with financing oil pipelines and other infrastructure that may contribute to long-term climate change
  2. Social risks resulting from the negative impact of pipeline construction on the rights of indigenous peoples

Portfolio managers can urge banks and other financial institutions to conduct thorough ESG risk evaluations prior to financing projects with potential adverse environmental or social impacts.

4. Willing to Put it Into Writing

With the growing popularity of RI, the market is now flooded with potential options – but that doesn’t mean they all meet high ESG standards.

If you’re concerned that some funds may only be paying lip service to RI, there is a simple way to root out the pretenders: check the prospectus for an unambiguous statement that identifies RI as a core investment objective. If no such statement is present, the portfolio manager may not have a very strong commitment to RI.

IA Clarington Inhance SRI Funds, managed by sub-advisor Vancity Investment Management Ltd., are an example of a responsible investment option that incorporates all of these features. The Inhance SRI Funds use an active, integrated approach that combines strict ESG criteria with rigorous fundamental financial analysis.

Sources

  • Global Sustainable Investment Alliance, 2016 Global Sustainable Investment Review.
Disclaimer
The information provided herein does not constitute financial, tax or legal advice. Always consult with a qualified advisor prior to making any investment decision. Statements by Vancity Investment Management Ltd. represent their professional opinion, do not necessarily reflect the views of iA Clarington, and should not be relied upon for any other purpose. Information presented should not be considered a recommendation to buy or sell a particular security. Unless otherwise stated, the source for information provided is the portfolio manager. Statements that pertain to the future represent the portfolio manager’s current view regarding future events. Actual future events may differ. iA Clarington does not undertake any obligation to update the information provided herein. The information presented herein may not encompass all risks associated with mutual funds. Please read the prospectus for a more detailed discussion on specific risks of investing in mutual funds. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Phishing for Better Cyber Risk Disclosure

Yahoo!, Equifax and Sony have all been affected by an increasingly common event: large data breaches that harmed their reputation and caused them to lose the trust of their customers.

As external attacks like these happen more frequently, investors need to understand the data security practices of the companies they invest in. They need to be confident that companies are mitigating related risks and are prepared to respond to a breach quickly and effectively.

Going Above and Beyond

The Sustainability Accounting Standards Board (SASB) defines “data security” as “technologies, processes, and practices that companies employ to protect networks, computers, programs, digital products, and data from external attacks, damage, or unauthorized access.” Thus, “data security” and “cyber security” can be used interchangeably in this context.

According to the 2017 PwC US Protect.me survey, 92% of consumers agree that companies must be proactive about data protection and 60% say the responsibility of protecting data rests with companies — not governments. Furthermore, they expect companies to go beyond legal requirements. In light of these concerns, PwC suggests companies put cyber security and privacy at the forefront of their business strategy to retain customers’ trust.

Cause and Effect

A Ponemon Institute and IBM Security study of 419 companies in 13 countries found that data breaches are mainly caused by malicious or criminal attacks (47%), a human error (28%), or a system glitch (25%). Astoundingly, they found that the total cost of a data breach averages $3.62 million.

In 2017, the Canadian Securities Administrators (CSA) reviewed 240 S&P/TSX Composite Index companies’ annual filings. They noted that the following potential impacts of a cyber security incident were frequently identified by a variety of issuers across different industries:

  • Compromised confidential customer or employee information;
  • Unauthorized access to proprietary or sensitive information;
  • Destruction or corruption of data;
  • Lost revenues due to a disruption of activities, incurring of remediation costs;
  • Litigation, fines and liability for failure to comply with privacy and information security laws;
  • Regulatory investigations and heightened regulatory scrutiny;
  • Higher insurance premiums;
  • Reputational harm affecting customer and investor confidence;
  • Diminished competitive advantage and negative impacts on future opportunities;
  • Effectiveness of internal control over financial reporting.

Business Case for Cyber Risk Disclosure

Investors looking to assess if a company is protected against data breaches would typically look to company disclosure regarding cyber risks, potential impacts, as well as governance and risk mitigation. However, companies do not disclose this information consistently and completely. In the same review, the CSA found that only 61% of the companies addressed cyber security issues in some capacity in their disclosure of risk factors.

These findings can be extrapolated to companies outside of Canada. The PRI recently published a report which summarized a review of 100 companies’ public disclosure on cyber governance and risk management. The research sample included companies in a variety of sectors from Europe, the US, Australia and Asia. The report states that “While companies generally perceived cyber security as a key organizational risk, very few communicated that they have policies, governance structures and processes that were effective at tackling cyber threats.”  The report is an excellent tool for investors looking to engage with companies regarding cyber risk. For each key question the research covered, investor relevance is explained and good practices for companies are outlined.

Cyber security incidents have the potential to materially impact a company. Investors need to engage with companies to request more comprehensive disclosure regarding cyber risk governance and risk management practices. Hopefully in the future companies will improve corporate disclosure regarding data security. In the meantime, investors can use the PRI report as a guide in their stewardship efforts.

Sources:

  • The Sustainability Accounting Standards Board. “The State of Disclosure 2017” (2017).
  • PwC. “Consumer Intelligence Series: Protect.me” (2017).
  • IBM Security and Ponemon Institute. “2017 Cost of Data Breach Study” (2017).
  • Canadian Securities Administrators. “CSA Multilateral Staff Notice 51-347 Disclosure of cyber security risks and incidents” (2017).
  • Principles for Responsible Investing. “Stepping Up Governance on Cyber Security: What is Corporate Disclosure Telling Investors?” (2018).
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Case Study: Integration of ESG Analysis in Emerging Market Equities

When investing in Emerging Markets (EM), environmental, social and governance (ESG) factors can play a significant role in identifying growth opportunities, in addition to their more conventional role in helping to mitigate risk and enhance companies’ ability to deliver long-term, sustainable returns.

To illustrate how this works in practice, we asked the RBC Emerging Markets Equity (RBC EME) team to explain their approach to Marico Ltd., an Indian consumer staples company. This RBC Global Asset Management (RBC GAM) investment team is based in London, UK and manages over US$8 billion in emerging markets equities. The team’s disciplined investment process considers a broad range of factors and incorporates a strong belief that a company’s ESG record must be analysed in order to truly gauge the company’s overall potential for investment portfolios.

Combining Financial Analysis with ESG Analysis

Marico is a leading Indian consumer staples company that operates in 25 EM countries. It has developed several brands in the hair and skin care, edible oils, health foods and male grooming categories. Its biggest and most famous products being Saffola edible oil and Parachute coconut hair oil.

When the RBC EME team researches a company such as Marico, they begin by reviewing annual reports and financial statements before meeting with the company and carrying out detailed valuation work. When it comes to valuation, the RBC EME team concentrate more on cash flow-based valuation than short-term measures like price-to-earnings or price-to-book.

According to the team, companies that pay attention to ESG factors and stakeholder relationships tend to have higher – and more sustainable – returns over time.

The next step in the evaluation process is the ‘investment checklist,’ which is the key tool for the integration of ESG factors. The checklist has 75 questions divided into three sections: franchise, management quality and corporate governance. The questions are extremely detailed, with approximately two-thirds of the questions related to ESG and sustainability. The checklist is a way to thoroughly understand what motivates a company’s management in terms of its culture, ESG and long-term sustainability, while helping to ensure that the team does not overlook any potential risks. Companies receive a score between 0 and 100 and most companies owned have a checklist score greater than 80.

The questions have a long-term focus and, therefore, scores tend to remain stable over time. Additionally, there is a high correlation between a company’s checklist score and its ultimate weighting in the portfolio.

How a Company Relates to Its Stakeholders

Marico’s company philosophy, “be more, every day,” was created to sustainably transform the lives of all of its stakeholders. This focus on stakeholders is a crucial component in the RBC EME team’s analysis and, accordingly, many of the checklist’s questions relate to how a company treats its various stakeholders.

Marico’s most unique feature is its strong relationships with suppliers and farmers. Marico’s ‘Farmer First’ policy is a key corporate social responsibility initiative. Agricultural produce forms the majority of Marico’s raw materials and consequently, implementing initiatives to improve farmers’ well-being drives Marico’s sustainability efforts. Marico’s engagement with agricultural producers has empowered farmers to strengthen their production systems and increase yields on a sustainable basis. These initiatives are directed primarily towards India’s coconut and safflower growers.

Edible oil is Marico’s key product, with roughly 20% of total sales attributable to Saffola Edible Oil and over 60% market share in India. Safflower seeds are the key ingredient and Marico is India’s largest buyer with 32,000 farmers under contract.

How a Company Improves and Maintains Industry Standards

The checklist asks if a company’s processes emulate best practice and encourage the improvement of industry standards. Marico scores well in this category. Its representatives collaborate with farmers to improve crop cultivation and offer technical guidance throughout the crop cycle. Regular seed-sowing classes are taught by selected farmers to spread ‘best practices’ to other local farms.

The checklist also questions ‘cutting corners’ in production (e.g. using poor quality materials, or not paying suppliers enough). There is no evidence of this at Marico. The company ensures that good quality sowing seed is available to its farmers and its model contract provides farmers with a guaranteed, predetermined ‘fair price’ for seeds; it offers market rates whenever prices rise, and a guaranteed price should they fall. Marico has been instrumental in the introduction of new technology for safflower production and, consequently, has improved productivity.

Thanks to these initiatives, farmers have significantly improved the seed replacement rate resulting in a 2 percentage point increase in oil content from 29.5% in 2011-2012 to 30.15% in 2015-2016. Any increase in the percentage of oil content leads to a significant increase in farmers’ incomes.

Marico generates more than 30% of its revenue from its Parachute coconut oil product, India’s leading brand, with more than 50% market share in India. Marico has developed robust relationships with coconut farmers by showing them how to increase productivity and create long-term crop sustainability and higher returns. The checklist asks whether or not a firm’s culture is innovative and Marico has scored well with its supply chain innovations. Over the last 10 years, collection centres have been set up within a 20-30 kilometre radius of the farms so that small farmers can supply Marico directly. This reduces transportation times and provides farmers with a guaranteed buyer for their produce.

Marico also provides guidance on how to produce coconuts of the right quality that will receive the maximum price, and how to automate the dangerous and lengthy process of harvesting and drying coconuts and extracting the oil. Those farmers who adopted Marico’s best practices early have seen an improvement in productivity of up to 20%, and to date the program has benefitted approximately 7,700 coconut farmers.

The example of Marico and, in particular, its Farmer First policy, demonstrates how important effective management of ESG factors can be in reducing risk, and building a foundation for sustainable long-term growth in EM equities.

Sources:

  • The information is current as at the 2016/17 financial year.  This information is for illustrative purposes of RBC GAM’s approach and does not constitute an offer, solicitation or recommendation to buy or to sell any security. Any buy or sell decision by RBC GAM would be as a result of any number of factors which may or may not be addressed in this article.
  • The RBC EME team is part of RBC Global Asset Management (UK) Limited
  • Marico Sustainability Report 2015-2016
  • Marico Annual Report 2016-2017
  • Marico.com as of November 2017
  • http://marico.com/ar/sustainability-report-summary.php.
Disclaimer
Past performance is not indicative of future results. Market conditions are subject to change. All views, opinions and estimates expressed herein constitute RBC GAM’s judgement as at the indicated date of the information or of this document, are subject to change without notice, and are provided in good faith but without legal responsibility.  Information obtained from third parties is believed to be reliable, but no representation or warranty, expressed or implied, is made by RBC GAM as to its accuracy, completeness or correctness. RBC GAM assumes no responsibility for any errors or omissions.
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.