2021 RIA Conference Summary – Masterclass: Case Studies in Canadian Investor Stewardship

June 15th, 2021

Jennifer Coulson, Vice President, ESG, BCI
Lindsey Walton, Head of Canada, Principles for Responsible Investment
Jamie Bonham, Director, Corporate Engagement, NEI
Sarah Couturier-Tanoh, Senior Shareholder Engagement and Policy Analyst, SHARE

Conversations around active ownership have evolved toward broader stewardship, making this an exciting time in the industry, said Lindsey Walton, Head of Canada at Principles for Responsible Investment at the RIA’s conference session “Masterclass: Case Studies in Canadian Investor Stewardship.”

“Canada has a uniquely collaborative financial industry that’s well positioned to influence sustainability at scale,” she said.

Walton, along with Jennifer Coulson, vice president of ESG at BCI, Jamie Bonham, Director of Corporate Engagement at NEI, and Sarah Couturier-Tanoh, Senior Shareholder Engagement and Policy Analyst at SHARE, shared with the audience some effective strategies for engaging with Canadian companies.

“The perception that investors have on human capital management is changing,” Couturier-Tanoh said while explaining how SHARE has been working to encourage better company practices. “Because of that, companies are more receptive to shareholder engagement.”

Before SHARE begins engaging with a company, they conduct a deep analysis exploring the risks and challenges the company might be facing, as well as what gaps may exist.

“We look for opportunities to drive changes that would positively contribute to shareholder long-term value,” Couturier-Tanoh said. “These gaps can be identified at a company level. For instance, when a company lags behind its peers in adopting certain policies and practices.” But, gaps can also occur at the sector level, she added.

The panel also emphasized the importance of getting clear on your message when filing a resolution, which is especially important given the 500 maximum word count.

“Filing a resolution is the easy part,” Bonham added. “It is the follow up where all the work comes in to get a vote out.”

Bonham shared that engagement is not always a speedy process, but every effort counts. “Perseverance is really important,” Bonham said. “Staying at it, as well as being able to pivot when things don’t work out the way you want them to. Even if it does feel like you’re banging your head against a wall, it is still likely to have an impact.”

Working with others can also help to achieve great things. “With complex and challenging dialogues, there is great value in collaboration. It’s a big time commitment to do that, but it’s really useful,” Bonham said.

For instance, the panelists spoke of Climate Action 100+, which is an investor-led initiative to encourage necessary climate action from the world’s largest global greenhouse gas emitters.

There can be potential roadblocks in collaborative agreements like Climate Action 100+, however. For instance, some investors may want to move faster than others. The upside is that this can encourage valuable discussion.

“It’s great for investors, like myself, who maybe want to push something faster to hear the rebuttal of why investors aren’t comfortable with that path,” Bonham said. “If you think about it, these are investors who have signed a collaborative engagement on climate change and are saying they’re not comfortable. Think of the other investors who aren’t even at the table and what their reluctance might be. There’s a lot to learn from that.”

Coulson added that it’s important to understand differences. “We can’t assume all investors are the same. We all have different mandates, different legal structures, different portfolios,” she said.

“But, if we don’t ultimately get to a Paris aligned economy, it’s going to be very hard for us to generate any kind of returns given the economic impacts that are predicted.”