In this new series, we interview members of the RIA board of directors to share their stories and journeys into the field of responsible investing. It’s also an opportunity for RIA members to get to know the board. In June 2018, the RIA board elected Ian Robertson as the new chair of the RIA. In addition to his role with the RIA, Ian is also Vice President, Director & Portfolio Manager with Odlum Brown in Vancouver.
RIA: How did you become interested in responsible investing? Was there a catalyst that led to a shift in your perspective?
IR: Like many people, I understood ‘responsible investing’ (RI) to mean values-based screening, which runs counter to the financial theory taught in the CFA program and which I therefore treated with some skepticism. As I started to distinguish amongst the different terminology – RI, socially responsible investment (SRI), ethical investing, green investing and divestiture – I began to appreciate the different history behind each term, and that the terms encompassed both values-based and valuation-based investing. After taking the RIA’s advisor certification course, which is about 10 hours long and self-paced, I saw how integral RI was to effective portfolio management. I learned that failing to integrate material, environmental, social and governance (ESG) issues into security analysis and proxy voting could result in sub-par returns or higher risk – just the opposite of my original understanding! It took some time and effort to learn about RI and to appreciate how integral it should be to the portfolio management process, which isn’t to say that investors can’t align their portfolios with their values, but rather that ESG integration should be core in any case.
RIA: What’s the greatest challenge to the widespread adoption of RI in Canada?
IR: I think the greatest challenge is awareness and understanding. Investors have always brought their personal values to their portfolios, and that doesn’t need to change. What does need to change is that both investors and investment professionals need to appreciate how important it is to consider material ESG risks in selecting stocks for a portfolio, and how important it is that ownership voices are heard through proxy votes. Small shareholders don’t have much of a voting voice in a large company, but there are a lot of small shareholders and together with larger institutions’ votes the collective voices can make a difference in nudging corporate behaviour towards better ESG outcomes. When analysts and shareholders pay attention to material ESG issues, companies pay attention as well, and at the end of the day we should end up with better investment performance and better corporate citizens.
RIA: Where do you imagine ESG/RI will be in the next 5 to 10 years?
IR: I think in five to ten years we’ll still be riding the education curve upwards. It takes time to educate people and for that knowledge to seep through into active investment practice. Beyond that, I think ‘responsible investing’ will eventually just be called ‘investing,’ because the concepts are so fundamental. Investors who don’t integrate material ESG factors into their analysis will be missing important information and will be at a disadvantage to those who do.
RIA: Do you have any advice for market participants who are just getting started with responsible investing?
IR: Yes – take one of the RIA’s courses or attend an RIA conference!
RIA: What’s the best concert or live performance you’ve ever attended?
IR: I’d like to give two. I saw the Talking Heads in the early 1980s on their Stop Making Sense Tour. They were a very theatrical band but on this tour, which was preserved as a film of the same name by Jonathan Demme, they took their theatrics in a new direction. The show started with the lead singer, his guitar and a portable cassette player that provided the beat. With each successive song a new instrument/band member would come on stage until the stage was full, including backup singers, percussion and horns. I had a chance to see the lead singer, David Byrne, again this summer, and he was still just as theatrical – essentially a two hour choreographed show with about 20 band members, all with portable (i.e. no wires) instruments.
Show number two was James Brown at Vancouver’s Commodore Ballroom until almost 3 AM. It was amazing.