There have been encouraging changes in the impact investing market as it matures, with asset owners and fund managers now paying more attention to the ‘Social’ or ‘S’ in ESG, expanding from the initial more limited focus on environmental sustainability (the ‘E’).

One social issue which intersects both social and environment categories and has taken on increasing pan Canadian prominence is the structural undersupply of affordable housing. The need for more affordable housing has been well documented in Canada, with housing 34 percent more expensive than median income household earnings and the largest cities in Canada topping the list of the least affordable in North America. Less firmly articulated have been tangible solutions, and specifically the imperative role of private capital, in tackling the housing crisis.

A growing market

This is a global issue, not just a Canadian one, and what we can learn from looking abroad is that impact investing is a critical part of the solution. There’s a significant need for private capital to help respond to this supply shortage through both debt and equity models.

Investor interest is expanding, and capital is beginning to flow at pace in other parts of the world. For example, investment into affordable housing funds has been the largest contributor to the growth of the social impact investment market in the UK, making up 42% of the market which is estimated to be worth £5.1 billion ($6.7 billion). Many of the funds emerging provide equity-like finance to acquire or develop properties through lease-based structures. This is one part of the solution to the UK’s housing affordability problem where there is a housing shortage of 60,000 homes/year and where, like Canada, home prices have soared in recent years.

Financing from UK government agencies, as co-investors in the funds rather than simply their traditional grant funding role, has been a helpful signal of support as the UK market matures. The fund management landscape is also evolving; fund managers, once specialist impact managers, now include some of the leading global asset managers, launching funds to provide affordable and specialist housing as well as housing to address homelessness, many with aspirations of raising hundreds of millions.

The amount of institutional investment flowing into this sector is due to the strong financial case for affordable housing funds: portfolio diversification, long-term index-linked income, combined with the significant demand for private capital.

What are we seeing in Canada?

CMHC has the ‘aspirational goal’ of eliminating housing need by 2030. While efforts have increased towards this end, for example CMHC’s Affordable Housing Innovation Fund and New Market Funds’ own affordable housing funds, we are only now starting to see the investor appetite in Canada that has emerged in the UK, despite a similar scope of problem and opportunity set.

Impact investment into affordable housing in Canada is of course not new, but there remain few funds that commit to delivering affordable housing in perpetuity based on community needs, working in partnership with local housing stakeholders. This community partnership approach is essential to investing in housing which works over the long-term.

Barriers to scaling up impact investment into affordable housing in Canada

Most ‘affordable housing’ in Canada is provided via mandates to private developers as part of larger, market-rate developments. The types of housing delivered through these developments is often limited to smaller, one-bedroom and studio units, unsuitable for the many families in need of affordable homes.

Additionally, the tenure length where affordability is limited to 10-20 years is inadequate because once that initial period expires, the housing often reverts to market rate, leading to security of tenure issues and impact loss over time. To make a sustainable impact, affordability should ideally be in perpetuity, built into lease and partnership agreements from the outset.

What we mean by ‘affordable’ also needs to be refined. While the standard definition links affordable rents to market rents, with growth of market rents consistently outpacing growth of incomes, affordability decreases over time. A more appropriate measure of affordability would be income-based, setting affordable rents at a maximum proportion of median net household incomes, adjusted for geography and number of bedrooms.

Lastly, there are secondary issues like housing investment activity inflating property valuations, unintentionally pricing out the beneficiaries that investors like public pension plans serve. These negative impacts need to be better understood and reported on as the sector grows.

Many of the above challenges are not unique to Canada. We can again look to social investment markets that have had a head start to avoid pitfalls and ensure that as the market here continues to grow, quality and suitability of the housing being delivered, and impact integrity, are at its core.

Standardizing impact management approaches

Accompanying the rapid market growth in the UK has been questions and inconsistencies about the way that impact is measured, monitored and reported. While many fund managers and housing providers have developed positive partnerships, there is not always transparency around the risk and return characteristics of investments or honesty about the impact additionality – that is, the actual impact that is achieved – from any given investment.

One initiative recently launched in the UK to help tackle these issues brought together leading fund managers to develop a common impact reporting approach for equity investment into affordable housing.  The purpose of the project is to set common reporting standards, mitigate negative risks, and encourage investment flows that make a positive difference on the supply and quality of affordable housing over the long term.

As the Canadian market evolves, similar ground rules will need to be established to set standards and ensure that incentives are aligned. This will help investors better navigate the social investment market and assess good opportunities from bad, encouraging as much capital as possible to flow towards delivering the genuinely affordable housing Canada so urgently needs.

RIA 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.

Many of Canada’s largest extractive companies have set ambitious environmental goals with long-term horizons (e.g., 2040 or 2050 net zero goals). One tangible way for companies to incentivize progress and demonstrate commitment to their environmental goals is by tying executive pay to specific climate metrics. This is becoming an increasingly common practice for Canadian companies, with 23% of TSX60 companies incorporating environmental metric/s into compensation^[1]. This article provides case studies of how 3 organizations that have each made 2050 net zero commitments^[2],[3],[4] incorporate environmental measures into their incentive programs using the following target-setting approaches:

• Absolute target (e.g., discrete numerical target set each year)
• Relative year-over-year target (e.g., target range relative to previous year’s results)
• Target positioning relative to peers (e.g., target ranking relative to peers)

Cenovus Energy – Absolute Target

Cenovus Energy (market cap: $29B) develops, produces, and markets crude oil, natural gas liquids, and natural gas internationally. Following its net zero 2050 commitment, the company has begun to incorporate this into its short-term incentive program (“STIP”) through an annual oil sands emissions intensity target with a 2.5% weight in the company’s 2020 corporate scorecard. Cenovus uses an absolute target-setting approach for this metric, which involves choosing a discrete emissions intensity target (e.g., 54.81 CO2e/BOE in 2020), and comparing it to actual results at year end. In 2020, Cenovus reported results of 52.01 CO2e/BOE, resulting in a multiplier of 1.6x on this metric.

Canadian Natural Resources Ltd. (“CNRL”) – Relative Year-Over-Year Target

CNRL (market cap: $62B) acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). CNRL has incorporated two environmental metrics, GHG emissions intensity and number of pipeline leaks, into its corporate scorecard. While the individual weightings of these metrics are not disclosed, they are two of four metrics included in the Company’s “Safety, Asset Integrity and Environmental” category, which has a 10% weight overall.  CNRL’s target-setting approach for these metrics involves setting targeted reduction ranges relative to the previous year’s results, with a threshold/maximum score of -/+10% (i.e., 2020 target  was 0.046-0.056 tonnes/BOE, which is +/-10% of the 2019 actual result of 0.051). In 2020, the Company performed within the targeted range on these environmental metrics.

Barrick Gold – Target Positioning Relative to Peers

Barrick Gold Corporation (market cap: $43B) engages in the exploration, mine development, production, and sale of gold and copper properties. In 2020, the Company introduced a Sustainability scorecard into its long-term incentive program (“LTIP”). This scorecard has a 25% weight in the performance share units (“PSUs”), and measures performance on 18 quantitative and qualitative ESG metrics (7 of which are environmental) ranked relative to peers where applicable.^[5],[6] Barrick’s target range is +/-10% of the previous year’s relative score, with a floor and ceiling of a “Grade A” and “Grade C” relative to peers (defined by sum of positioning on each metric). In 2020, the Company was scored in the top two quintiles of peers on all environmental metrics but one.

Conclusion

These are just some of the approaches to setting performance targets for an incentive plan metric. In selecting an approach specifically for an environmental metric, companies will need to consider where they are in their sustainability journey, the performance metric of choice’s alignment with strategy, and the availability of data among other factors. Regardless of which target-setting approach a company chooses, the key determinants to successfully including an environmental metric into the compensation program will depend on the metric’s ability drive towards the desired long-term objective, the calibration and rigor of the target levels, and the ability to clearly communicate this linkage internally to executives and externally to stakeholders.

Sources:

[1] Hugessen Consulting: “Emerging Trends in Executive Compensation and ESG Webinar”

[2] Barrick Gold: “Barrick Updates Its Evolving Emissions Reduction Target”

[3] Reuters: “Canadian Natural sets new emission goals after profit beat”

[4] Cenovus Energy: “Cenovus sets bold sustainability targets”

[5] Barrick Gold: “Barrick Sustainability Report 2020”

[6] For indicators based on internal priorities, Barrick evaluates “performance, progress and expectations rather than trying to force equivalence with peer programs”.

[7] Barrick bases its assessment on Sustainability Reports, GRI content indexes and associated data tables, and other publicly available information to determine its relative positioning.

RIA 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.

March 11, 2020, marks the day which the World Health Organization declared the novel Coronavirus (Covid-19) a global pandemic. It was a storm no one saw coming and one that continues to have us wonder when it will come to an end.

We will eventually overcome Covid-19, but will the normal we return to be the normal we once knew? At Waratah, we believe Covid-19 has presented itself as a significant catalyst for change in the world of Environmental Social Governance (“ESG”). When we began our ESG journey 3 years ago, we never expected a pandemic like Covid-19 would be the call-to-action event leading us to quickly adapt how we viewed ESG risks and opportunities in the Alternative ESG (“AESG”) strategy. With each passing month of pandemic-living, themes and trends have emerged, with some very likely to remain permanent.

Being Toronto-based, we experienced among the most restrictive lockdowns in North America (remember when Golf was illegal?). Thankfully, life appears to be slowly normalizing but many of the patterns we’ve developed as consumers in the Covid-era are persisting beyond initial predictions. This piece aims to highlight some of the Covid trends which have likely become permanent shifts, and how important it is for investors to recognize these shifts as opportunities to capture ESG alpha.

Remote Work and Productivity

Workers quickly pivoted to “work-from-home” and Zoom and other video-conferencing providers led the way in facilitating communication, allowing many industries to continue business as usual during the Pandemic. While Zoom fatigue is real, what consumers forget is what it has provided us, a commodity so valuable and finite – our time. We are all spending far less time in transit, enabling us to enjoy more meaningful activities, such as spending time outdoors, having quality time with our immediate families or focusing on our own personal goals. With the vast majority of companies exceeding quarterly estimates, it is evident that Covid has not stalled productivity output, dispelling the myth that home is a detractor of efficiency. Flexibility, once a privilege reserved for freelancers, has made its way into corporate work policies.

Last year Microsoft like many others, announced a hybrid work policy allowing employees to work from home permanently, embracing the fact there is a “no one-size-fits-all” strategy for its staff. From a conventional view, this would be not newsworthy, but from an ESG perspective, this is a significant social highlight, as we believe employee satisfaction is an important metric to measure productivity, human capital retention and talent recruitment. With the threat of the “Great Resignation” looming, Waratah believes companies embracing flexibility and a better work-life-balance will fare better than companies with less accommodating policies and cultures.

Consumer Spending Habits

With travel still largely on pause, another effect of Covid was spending the last year and half at home. This gave rise to the Waratah thematic of “home as a sanctuary” which led to the inevitable, the home improvement capex cycle. This emerging thematic contributed to several great alpha-generating opportunities. With pent up consumer demand and few places to go, it was evident that consumer spending would be geared towards people’s homes as they became our offices, restaurants, bars, and entertainment centres. With the rise in takeout dining and the increased environmentally conscious consumer, greener solutions were in demand, reinforced by polices banning single use plastics. Companies that embraced these changes early-on became top contributors to our portfolio. One example is a package manufacturer, who produces paper takeout boxes as an alternative to the typical non-recyclable black plastic. Other Covid beneficiaries such as Disney’s streaming and video on demand service created tremendous value given the idea of attending a packed movie theater seems even now, a risky proposition. As consumers ourselves, our team focused on unique and atypical areas of the market where we saw opportunity. An example is this past Summer, on the heels of several initial public offerings, our team was able to get behind a trend we were all enjoying and extract return from various IPOs under this theme over the summer. Even with the return to school and the office, it’s hard to argue with Dorothy: “there’s no place like home.”

Safe and Healthy Environments

The last Covid trend to highlight is Heating, Ventilation and Air Conditioning (HVAC), one we see as a long run-way opportunity. HVAC accounts for 15% of the world’s Greenhouse Gas emissions (GHG) generated by commercial buildings^[1] from schools, offices, and hospitals. While consciousness around GHG emissions is not a new awareness, what has been amplified because of Covid-19 is consumer demand for improved air quality and the reduction of circulated allergens, chemicals, and bacteria. We all know someone who ran out to buy HEPA air filters or voiced concerns over recirculated plane air. In the United States alone, 70% of all schools reportedly failed indoor air quality tests,^[2] a stat which is likely applicable to most commercial buildings as well. As such, we see HVAC as a massive 10–20-year infrastructure ESG tailwind that will long outlive Covid. Governing policies like “Build Back Better” have ear-marked $193 billion to improving school infrastructure moving forward^[2] in hopes that other ESG risks, such as another pandemic or environmental disaster doesn’t hold us hostage yet again.

The effects and impact of Covid on both ESG and consumers is undeniable. While many of us would like to forget the last year and half, we are all forever changed by it.  As we move on from this pandemic, consumer demand has shifted, and they will continue to expect and strive for cleaner, healthier, and happier lives. Through our ESG lens, a differentiated approach and ability to recognize these changes in consumer behaviour early allows investors to take advantage of less-obvious ESG opportunities as sources of alpha.

Sources:

[1] Source: Credit Suisse Trane Technologies Equity Research Report (March 2020)

[2] Source: JCI CFO at the MS Laguna conference on Sep 13

Contributor Disclaimer
Waratah may change its views in the subject companies discussed in this article at any time for any reason and disclaims any obligation to notify any party of such changes. The information and opinions contained in this article are not and should not be perceived as investment advice or a solicitation to buy or sell securities. Waratah makes no representation or warranty, express or implied as to the accuracy or completeness of the statements made in this article nor does it undertake to correct, update or revise those statements.

RIA 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.

Diversity has become a central theme in the investment industry. In 2018, SHARE (Shareholder Association for Research and Education) and NATOA (National Aboriginal Trust Officers Association) joined their efforts to create the Reconciliation and Responsible Investment Initiative (RRII) . The RRII has been spearheading the efforts to integrate reconciliation and responsible investment. In 2020, the Responsible Investment Association (RIA) of Canada, started an initiative to lead investors managing more than $4 trillion in assets to sign a statement to make commitments to promote Diversity & Inclusion across their organizations and portfolio companies.

Despite those recent initiatives, few Canadian RI policies or reports of institutional investors make references to Indigenous peoples. Beyond the recognition of Indigenous rights within due diligent processes linked to the Free, Prior, and Informed Consent (FPIC), Indigenous Peoples and their economic, social, and environmental well-being are relatively absent from the conversations in the Canadian Responsible Investment (RI) industry. [Editor’s Note: The recent Canadian Investor Statement on Climate Change signed by 36 investors managing $5.5 trillion in assets emphasizes the importance of Indigenous rights for investors.]

Faced with this observation, we decided to investigate further. As a research team at the Ivey Business School, Western University, we studied the practices of the industry for one year through interviews with stakeholders, observation of industry conferences, and documentary evidence. Our results are available in a new report that sheds light on the significant differences in the level of awareness of, and action on, Indigenous rights and reconciliation among the Canadian investment management firms.

This report aims to create a safe space to engage the Canadian responsible investment industry in the process of truth and reconciliation. It outlines the current relationships between Indigenous peoples and the RI industry in Canada and offers recommendations to build bridges and make progress towards reconciliation.

We examine how the Canadian RI industry specifically embraces six sub-themes deemed key to the process of economic reconciliation, to wit: 1) Recognition of Indigenous rights; 2) Diversity and inclusion (of Indigenous peoples); 3) Building a thriving Indigenous economy through partnership; 4) Fiduciary duty and Indigenous peoples; 5) Building an inclusive and just transition to a low-carbon economy through partnership; and 6) Indigenous environmental stewardship. We systematically analyze the inclusion of each theme in each step of the investment chain, from asset owners, asset managers to investee companies, and service providers.

Responsible investors usually assess Indigenous rights and concerns through the lens of risk management. While risk management is a critical component for investment decisions, it limits opportunities for the RI industry to contribute to reconciliation or the building of opportunities for all peoples to achieve their full potential and shared prosperity. The report recommends several steps that actors across the investment chain could implement to progress on the path of reconciliation. Possible actions include Investing in Indigenous-led (impact) investing products, Implementing comprehensive policies on Indigenous representation among employees and boards of directors, designing procurement policies for Indigenous businesses or educating and engaging Indigenous investors on proxy voting that relates to Indigenous rights, By engaging in reconciliation, the Canadian RI industry can lead the integration of ‘I’ in ESG and transition towards a climate-resilient and inclusive economy worldwide.

We believe that economic actors must address social inequalities and systemic racism to contribute to inclusive growth that creates opportunities for all. Including Indigenous peoples in the allocation, distribution, and valuation of capital is an essential step towards this endeavour. In addition, inclusive companies that manage ESG risks and improve outcomes for Indigenous peoples are also better investments.

The report is also an example of the current Canadian business schools’ efforts to respond to the Truth & Reconciliation Commission (TRC)’s Call to Action 92, which offers a roadmap for the business community to think about and practice reconciliation. Historically, Canadian universities played a central function in the processes of colonization. Indigenous peoples have had limited access to the universities and still, to this day, are underrepresented, under-resourced and neglected by researchers in the university system.

As business school scholars, we recognize there is much work to be done, and that the practice of reconciliation requires sustained commitment to not only actions, but also a sustained practice of confronting the places within current financial systems and sectors where Indigenous voices are absent. The following report not only maps out the spaces and places within the Canadian responsible investment industry where Indigenous voices are needed, but also offers a necessary roadmap for how this sector and its partners may begin to walk a path toward honouring truth and practicing reconciliation.

The report can be found at https://www.ivey.uwo.ca/sustainability/priorities/finance/

RIA 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.

As responsible investment (RI) continues to grow and evolve at a rapid pace, it is important for investment advisors to stay abreast of key trends and leading practices in the field. Of course, that is easier said than done in a pandemic world that has been characterized by chronic stress and nonstop Zoom meetings — especially when the RI market is evolving so quickly.

To help you stay informed in this fast-moving market, this article provides a quick overview of three big issues in RI that every advisor should know about: stewardship, impact measurement and net zero.

Investment stewardship

The concept of stewardship is gaining prominence among investors in Canada and globally, but what exactly does it mean in practice? While some market participants use the terms “stewardship” and “engagement” interchangeably, leading researchers and practitioners point out that good stewardship is much broader than shareholder engagement alone.

A 2020 report from KKS Advisors, a consultancy led by Harvard professor George Serafeim, stated that “stewardship reflects the role of investors as ‘stewards’ of the assets entrusted to them by their clients and the responsibility of investment professionals to carefully protect and enhance the value of those assets. It embodies the notion that investors are influential market players who have the power to shape markets, enhance governance and address market risks and opportunities affecting the health of the economy.”

Upon analyzing the stewardship practices of 40 of the world’s largest institutional investors, KKS Advisors concluded that stewardship has seven practical components:

1. Influence – Leveraging investors’ position within the financial system to drive a sustainable economy; for example, by raising ESG standards and promoting effective policies and regulations.
2. Engagement – Proactive dialogue with companies on ESG issues.
3. Voting – Communicating and exercising shareholder rights and expectations.
4. Promoting disclosure – Encouraging high-quality disclosure of ESG information.
5. Monitoring – Actively monitoring ESG performance and new regulations.
6. Collaboration – Participating in collective action and coordinating with peers to maximize impact.
7. Education – A commitment to internal ESG training and development.

Advisors who are interested in stewardship of their clients’ assets can use this list as a point of reference when examining asset management firms.

Impact measurement

Impact investing is also gaining prominence in the asset management industry. The Global Impact Investing Network defines impact investing as “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.” The key components here are intentionality and measurement. If positive impacts are not intentional and measurable, then we are not talking about an impact investment.

In the context of rising investor demand for positive impact and growing concerns about greenwashing, it is vitally important for fund managers to measure and report on the positive impacts that their clients’ assets are generating. The importance of credible impact measurement is compounded by the fact that we are seeing a growing number of public equity funds marketed as impact investments.

While there are numerous credible impact measurement frameworks on the market, there is no global standard across asset classes. This can make it challenging for investors and advisors to compare impact investments. As a result, the Impact Management Project (IMP) is seeking to build a global consensus on how to measure, manage and report the impacts of an investment. Here in Canada, the IMP has partnered with Rally Assets on their flagship education project called Impact Frontiers, which seeks to build the capacity of investment managers to integrate impact and financial management. These projects will take some time to play out, but given the weight behind IMP, whose advisors include PWC, KPMG, UBS, Bank of America, Ford Foundation and Dutch pension fund PGGM, among others, we can expect to see some level of convergence in the next few years.

In the meantime, fund managers should make use of the most credible tools and methods available to measure and report their positive impacts. Failure to do so could exacerbate concerns about greenwashing in the market. Advisors who want to see impact metrics from fund managers should communicate their expectations to the manager.

Net zero

You have likely seen headlines about “net zero” popping up in your newsfeed. Here’s why it’s a big deal right now in the investment industry.

The Intergovernmental Panel on Climate Change, a United Nations science agency, has reported that in order to avoid catastrophic impacts from climate change, we must limit the average global temperature rise to no more than 1.5°C above the preindustrial era. To achieve this target, global carbon emissions must decline by about 45% relative to 2010 levels by 2030 and reach net-zero by approximately 2050.

Governments around the world, including Canada, are pledging to reduce emissions in alignment with these targets. However, meeting these commitments will require a massive transition of the global energy system, creating risks and opportunities across sectors. These transition-driven risks are compounded by the physical risks flowing from a changing planet.

As a result, many companies and institutional investors are now making pledges to align their business and investment practices with net zero emissions. These commitments send a signal to the market that the business intends to manage the risks and capitalize on the opportunities of a transition to a low-carbon economy.

Conclusion

Stewardship and impact investing are two of the most important strategies available to investors who are interested in achieving net zero emissions. That’s because stewardship can help move companies toward more sustainable outcomes, and impact investing can help move capital toward industries, companies and projects that help drive down emissions. The key is that the positive impacts need to be measurable. If they are not, then it’s not clear that the needle is moving.

A version of this article was originally published in Investment Executive. Read the full article here.

While climate change is a complex issue often discussed as a source of risks, it also creates a new realm of opportunities for investors. However, if investors are to be successful over the long term, they must have the capability to identify and manage these risks and opportunities efficiently, which requires a deep understanding of the relationship between climate and the financial markets, two highly dynamic and interacting systems.

Carbon foot-printing is one of the tools available to help understand historic exposure to transition risks and when paired with comprehensive knowledge of the business, it provides valuable insights into a company’s ability to manage the impacts of future climate change. The outlook generated by the analysis, however, can sometimes be less useful in evaluating the future resilience of an asset or portfolio. On the other hand, scenario analysis, that includes a range of reasonable climate transition outcomes, can provide better insight into the strengths and weaknesses of a portfolio as well as its level of alignment with desired climate outcomes. In this article, we will discuss the application and assessment of climate scenarios for investment portfolios.

Investors can apply scenarios to investment strategies in the same way companies apply scenarios to their capital planning process to test resiliency under a variety of potential future outcomes. The International Energy Agency (IEA), Intergovernmental Panel on Climate Change (IPCC) and the United Nations-backed Principles for Responsible Investment (PRI) all offer a wide range of scenarios that are calibrated to climate change-related outcomes ranging from “business as usual” to “Net Zero by 2050”. There are three key considerations when applying these types of scenarios to investing:

• Scenarios ≠ Forecast: Scenarios involve numbers and a view of the future that can lead investors to an assumption that there is a single path to one future outcome. With any scenario, especially multi-decade climate scenarios, there is a great deal of uncertainty associated with factors such as international coordination, consumer behavior, technological innovation and corporate strategies. Therefore, the resilience of portfolios can really only be tested by using a range of scenarios that focus on what “could” reasonably happen rather than what “should” happen. Key outputs are the distribution, magnitude and likelihood of events that can be mapped back to long-term investment value creation and current market expectations.
• Investment-relevant parameters: Most current scenarios require knowledge of a specific business and expertise in translating factors like warming potential and carbon price into parameters that can influence a financial model. More recently, a joint effort was initiated by central banks and governments to standardize a range of scenarios that will likely further delineate key metrics such as credit and liquidity risk. Even more granular scenarios like the IEA Net Zero by 2050 will also help to bridge the existing gap.
• Time Frame: Although there is a general sense that the impacts of climate change are more imminent than ever, the larger and more likely impacts on earnings and cash-flows are potentially still outside of the 5.5-month average holding period for assets like U.S. equities. That being said, a more thoughtful approach to the implied long-term growth rates in multiples and terminal assumptions of a valuation model can help to incorporate medium- to long-term changes into even shorter-term investments.

Net Zero(ish)

With the increased momentum in country and corporate transition strategies and the growth in physical changes influenced by climate change, it seems sensible to include a net-zero scenario in the range of options to test the resilience of an investment portfolio. However, the term “net zero” is used in different ways by different groups. The IEA’s recent Net Zero by 2050 provides a detailed and economically relevant example of a scenario that defines “a” path and applies additional analysis looking at the sensitivity of their scenario to key areas of uncertainty such as changes in consumer behavior, technological innovation, energy security and use of nuclear and carbon capture. Regardless of the label, investors need to critically assess a number of parameters to understand the commitments made by companies and the commitments they may consider for their own portfolio:

1. Accountability: Who has the mandate to achieve the goal and how are they incentivized to reach it?   For industries with high levels of exposure, it could involve the implementation of a specific board committee and climate-related linkages to executive compensation.
2. Alignment: Alignment with the capabilities and value creation of the business (or investor) and the relevant commitments of peers and local governments. The path to net zero can have varying meanings across different industries and regions.
3. Base Year: The reference year for emissions is usually not the current year and needs to be assessed based on the quality of the data available and the percentage of reductions that are expected to come in the future.
4. Scope: The decision to commit to intensity or total emissions reductions will depend on the growth trajectory of the business or the portfolio. However, there is often an expectation for businesses to be focused on total emissions over time. According to the GHG Protocol Corporate Standard, a company’s emissions can be classified in three scopes. Scope 1 and 2 reductions should be seen as standard disclosures. Scope 3 emissions should be critically assessed for coverage, available data and reasonableness, as they are voluntary and the hardest to monitor.
5. Milestones: At a minimum, there needs to be high-level targets and milestones for 2030 and 2050, but some indication of an iterative process with 3- to 5-year windows for reassessment would be positive.
6. Offsets and Innovation: It is difficult to imagine achieving Net Zero by 2050, without the use of carbon offsets and new technology. Offsets should be evaluated on transparency, total contribution, whether they avoid or reduce emissions and the relative risk of reversal. Innovation’s contribution should be transparent about uncertainties and the amount of reductions coming from earlier-stage technology.

Conclusion:

Despite the challenges related to the kind of analysis required, there is likely to be value for investors and other stakeholders in trying to integrate the analysis of the risks and opportunities associated with climate change across their portfolios. Ultimately, successful investors are ones that have greater or faster access to information and find inefficiencies enabling them to better manage risk and capture return. Building portfolios that can be resilient through a variety of different climate futures can be beneficial to asset owners and society as a whole.

RIA 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.

Before the outbreak of the Covid-19 pandemic, healthcare issues at nursing homes were often overlooked. The past year starkly demonstrated that inadequate working conditions and inadequate elderly care are important human rights issues that urgently need to be addressed. As investors, we must contribute to driving positive change in this sector.

Many nursing home staff work in stressful environments. They often earn low wages on part-time hours or through precarious arrangements – in some countries without sick pay or union representation. Most staff are women, and often they are minorities or from marginalized backgrounds. Nursing homes struggle to attract and retain enough workers to meet current demands, let alone the need for more caregivers to match demographic shifts. The staff-to-resident ratio in many homes is inadequate to provide even basic care to residents, let alone the quality required during a pandemic.

The glaring spotlight of Covid-19

During the pandemic, nursing home workers have been caring for those most vulnerable to the virus in extremely high-risk environments. The sector found itself in the eye of the storm, largely owing to a global unpreparedness for a pandemic of this scale and failures by governments to support and regulate nursing homes and their residents. This exacerbated the inherent vulnerabilities of aged care, and led to some very sobering numbers:

• According to this report, an average of 41% of all deaths across 22 countries happened in nursing homes.
• Hundreds of thousands of nursing home staff became infected during the pandemic – many of whom either died or are now facing long-lasting aftereffects.

Throughout the pandemic, scandals relating to nursing homes were prevalent. In Canada, this report by the International Longevity Centre declared the diminishing recognition of the human rights of older people as the most severe impact of the Covid-19 pandemic; a statement that speaks volumes and is backed up by plenty of alarming information relating to rising elder abuse and ageism, among other violations of health care regulations, within nursing homes.

Meanwhile, healthcare workers at Responsive Group’s Rykka Care Centres filed a human rights complaint for gender and skin colour discrimination, calling for better working conditions and the replacement of management at the centres. The provincial government was also named a Respondent for its failure to properly regulate and oversee operations at long-term care homes.

In the UK, Amnesty International reported that a series of “shockingly irresponsible” decisions taken by Government – including the decision to discharge infected hospital patients to nursing homes – risked the lives of tens of thousands of elderly people and led to multiple violations of their human rights. One year into the pandemic, research by UNI found that most care workers still do not earn a liveable wage, and nearly a third are without adequate access to personal protective equipment.

Why does this matter to investors?

As nursing homes recover from the virus, we must use this opportunity to improve the sector permanently by developing a more resilient and humane working model. Doing so will address fundamental human rights issues and contribute to a fairer and more sustainable society for us all.

If human rights weren’t reason enough to demonstrate why improving this sector is so important, there are also important business reasons to consider. Better working standards will promote better care, ultimately helping to mitigate legal, reputational and operational risks for companies within this sector. For example, this Bloomberg Canada news story from May 2020 reports on plunging shares in long-term care home companies in the aftermath of the Ontario care scandal, whereby a Canadian Armed Forces report detailed “horrific” treatment of residents.

Practical takeaways and actionable steps for investors

Companies must raise standards for working conditions and quality of care, but the weight doesn’t fall solely on their shoulders: governments and regulators must ensure that regulatory environments and funding provisions enable nursing homes to meet higher standards. As investors in this sector, our role is to set clear expectations of companies for improving these standards.

Along with 99 other financial institutions and representing $3.5trn in combined assets under management and assets under advice, we developed and signed the UNI Global Union investor statement on expectations for the nursing home sector. The statement is still open to be signed and supported by investors. We’re asking investee companies:

• To develop and implement standards that not only adapt to, but go beyond local regulatory requirements for understaffing, health & safety, wages, collective bargaining and quality of care.
• That own real estate used for nursing homes – such as Real Estate Investment Trusts – to support operators in meeting these expectations by overseeing their properties and monitoring processes to ensure our standards are met.

At BMO GAM we have contacted 13 nursing home companies and trusts to urge appropriate staffing levels, improved health and safety standards, proper use of PPE, fair wages, pandemic hazard pay, and freedom to unionize. At the time of writing, three of these have responded, with dialogues due to take place soon.

We have also supported AGM questions at Fresenius SE around labour standards , and shareholder proposals filed by fellow investors at companies such as Chartwell Retirement Residences, requesting more information on human capital management and paying a living wage to staff.

Final thoughts

We believe these expectations have come at a crucial time: the bar for working conditions and quality of care in nursing homes clearly needs to be raised, and we look forward to working with companies and other investors to create change for good. We believe that addressing these issues will improve confidence across investors, regulators, workers, residents and their families in the nursing home industry – in this period of grave concern and beyond.

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BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp., BMO Asset Management Limited and BMO’s specialized investment management firms.

®/™Registered trade-marks/trade-mark of Bank of Montreal, used under licence.

RIA 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.

If you were looking for a single statement to sum up the state of technology in the late stages of the COVID-19 pandemic, you’d be hard pressed to do better than this quote from the information hub ESG Investor:

“A highly-profitable, innovative and far-reaching sector operating in a morally grey area, practising behaviours that aren’t technically illegal, but are arguably unethical.”

So, what, exactly, does ‘arguably unethical’ mean? For some it is the way technology companies use the data of their users, where an unclear or hidden ‘consent’ can open up all manner of possibilities for the use and sharing of personal user data. For others, it is the unfettered use of technology platforms to spread hate. And for some it is the use of digital technologies to plan and execute disruptive activities in the physical world.

Big tech is well aware of these concerns, as digital rights are squarely on the agenda of human rights focused investors and activist-led activities in the tech space. Yet Google and Facebook, among others, have a reputation of dragging their feet when it comes to being transparent on their approaches to following the rules related to human rights concerns within their business models.

In a paper titled The ESG Imperative for Technology Companies, KPMG discovered that though 57% of technology CEOs acknowledge they “must look beyond purely financial growth to achieve long-term sustainable growth”, most identify climate change – not human rights – as the biggest sustainability risk to their businesses. The response from technology companies to the breadth of their ESG risks is at best, inconsistent and too often it is absent altogether. KPMG sums it up this way: “Heightened awareness and appreciation of ESG issues has not fully translated into business practices yet.” If we pit this realization against the fact that addressing human rights risks in business models is a key focus area of the B-Tech Project (a feature of the UN Office of the High Commissioner of Human Rights which focuses on implementing the UN Guiding Principles on Business and Human Rights in technology) we see that there is a resounding disconnect.

The business model risks: we need inside-out solutions for inside-out problems

Ranking Digital Rights (RDR), which works to promote freedom of expression and privacy on the internet, noted in the release of their most recent 2020 Corporate Accountability Index that none of the companies they rank “which collectively provide information and communications services to billions of people around the world – came even close to earning a passing grade on [the RDR’s] international human rights-based standards of transparency and accountability.”

For responsible investors, this indictment is doubly troubling. Technology companies are prominent holdings in many responsible funds, largely owing to their favourable response to environmental risks. And, over the last year of COVID-19 in particular, those holdings have delivered exceptional returns. But what of the human rights-centred risks inherent in the business models of big tech? Unmanaged, these risks threaten company sustainability efforts by potentially undercutting the very principles of civil liberties, freedom and democracy from which technology companies benefit.

We are at a juncture. If we are to remain committed to seeing our investees in the technology space work towards sustainable value creation, it is incumbent on us as investors to hold tech players accountable on how they manage the very real human rights and digital rights risks they face. We must now grapple with the reality that these risks are central to – and deeply embedded in – the very business models that technology companies rely on for the success that has financially benefited investors. It is not acceptable to simply turn a blind eye to the negative social implications of this vast wealth creation.

With great influence comes great responsibility

The unique challenge and opportunity for investors is that we innately approach technological products and services from different vantage points. Because we are all users of technology, we are all also vulnerable to the very risks we are seeking to address – not just as investors, but as consumers, too. That means acknowledging the investment benefits of technology, and the positive uses and applications stemming from increased access to the internet and digital platforms, while at the same time understanding the price we’re paying for that access. We need only look to the past year alone to see how human rights risks are materializing and having real implications for society. Instances like the January 6 attack in the US, the #stophateforprofit campaign initiated against Facebook, concerns about the use of tech to facilitate mass surveillance, and the ethical issues around artificial intelligence, are but a few examples.

The point is, notwithstanding the noble intentions upon which today’s technology leaders were founded, or the undeniable social benefits of technology, the good does not negate the bad.

We are in a strong position to leverage our knowledge as users and our influence as investors to have conversations with tech players about mitigating the negative social impacts of their businesses. It is incumbent on us to push companies for the disclosure and transparency needed for all stakeholders to better understand if and how companies are managing these risks.

We believe an important starting point as investors is making clear our expectation for more robust human rights oversight mechanisms at technology and telecommunication companies. At NEI, we are advocating for robust human rights governance structures that are adaptable to meet the ever-evolving state of play in the industry. We encourage other investors to consider what steps they can take in advancing these dialogues. Investors may seek to do this through solo engagements, group collaborations, coalitions like the Investor Alliance for Human Rights, proxy voting processes or filing proposals. Divestment may be an option if it enhances the leverage of remaining investors, but for us at NEI, we are not ready to give up our seat at the table to push for progress. We believe our voice, and the voices of as many investors as possible, need to be heard in the boardrooms of big tech. As investors we have a responsibility to hold technology companies accountable, and we should be leaning into our ability to push for needed transparency on human rights risks, which can no longer be seen as optional.

We can’t afford to sleep on this. The stakes are too high. The risks are too great. And the impacts too broad.

RIA 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.

After Years of Gains, Women Bore Brunt of Pandemic-Related Layoffs

In the fourth quarter of 2019, the female share of total employment hit 50% for only the second time in history (the first being in 2009-10). From this peak, women accounted for nearly 55% of total job losses during the initial wave of COVID-19 pandemic layoffs and the female share of total employment fell to 49.1% by May 2020. Women recovered jobs at a faster pace than men in the subsequent months and today female employment has rebounded to 49.7% of the total.

One less-explored potential reason for this dynamic is the large share of female workers in industries most-impacted by the pandemic. Leveraging academic research, we classified industries as having high or low COVID-19 exposure based on 1) ability to work remotely, 2) essentialness, and 3) impact of supply and/or demand shocks from COVID-19. Unsurprisingly, the vast majority of layoffs were concentrated in high exposure industries such as leisure/hospitality and retail. Those industries have also seen a greater subsequent recovery.

Exhibit 1: A Tale of Two Labor Markets

High and low COVID-19 exposure is based on industry-level data measuring data including the ability to work remotely, essential vs. non-essential status, and supply/demand shocks resulting from the COVID-19 pandemic. Aggregate net change in payroll employment in these industries is measured relative to February 2020 peak employment levels. High COVID-19 exposure industries account for ~60% of pre-pandemic total non-farm payroll employment; Low COVID-19 exposure industries account for ~40% of pre-pandemic total non-farm payroll employment. Data as of April 30, 2021. Source: Bloomberg, BLS, INET Oxford

What is surprising, however, is before COVID-19 hit, females accounted for 58% of employment across high-exposure industries and just 38% of the workforce in low-exposure industries (such as manufacturing and technology). Put differently, women accounted for a greater share of jobs in the industries that were harder hit by the pandemic, and a smaller share in industries that were more insulated. Interestingly, women actually lost more than their pre-pandemic share of jobs within high-exposure industries but lost fewer than their pre-pandemic share of jobs within low-exposure industries.

There are other reasons why women were more impacted than men by the pandemic within the labour market. Researchers at the Federal Reserve Bank of San Francisco recently publish a paper “Parents in a Pandemic Labor Market” that found a pandemic divergence in labour force participation (those who have jobs plus those actively seeking jobs) between fathers and mothers. Specifically, labour force participation had shrunk by 1.1% for fathers during the pandemic compared to a 3.4% decline for mothers. While many mothers were returning to the labour force during the spring and summer of 2020, a large drop off occurred in the fall when school resumed (virtually for many) as shown in Exhibit 2. Approximately one-third of K-12 students are still attending hybrid or virtual-only school today, according to data aggregator Burbio.

Exhibit 2: Labor Force Participation During COVID-19 by Parental Status

Data as of March 31, 2021. Source: Federal Reserve Bank of San Francisco.

This would support the notion that childcare responsibilities (including remote-learning supervision) have been falling to women more than men. Some women have had to make the difficult choice between a job and taking care of their children due to the pandemic, and this has weighed on female employment levels. In fact, 33% of non-working women between the ages of 25 and 44 cited childcare demands as the primary reason for their departure from the labour force, compared with just 12% of men according to the Census Bureau. The aforementioned research paper also finds a strong correlation between female employment trends and flexible working hours. Specifically, industries with a higher share of jobs with flexible hours saw fewer female job losses, while industries with a lower share of flexible hour jobs saw greater female job losses. This dynamic was less pronounced for men.

Pandemic Silver Lining – Remote Work Gaining Acceptance

We believe this finding is encouraging, given an increasing post-pandemic shift towards greater workplace flexibility. Further, the normalization of these practices should bode well for female employment. Prior to the pandemic, only 7% of the U.S. workforce had access to remote-work policies and related flexibility benefits according to the Bureau of Labor Statistics. During the peak of stay-at-home last spring, it was estimated that nearly 50% of Americans were working remotely, and many companies are planning on keeping partial or even full work-from-home policies once COVID-19 subsides.

With more Americans likely to work remotely part of the time in the future, perceptions around remote work are also likely to change. According to Ellen Ernst Kossek, a Purdue expert on inclusive organizations, “[Pre-COVID] research shows that if you’re using telework and flexibility to finish a project late at night, managers love you; if you’re using it for family or personal reasons, they stigmatize you and think you’re not career-oriented.” With many seeing just how productive they can be, the stigma of remote work is likely to be lessened in the future.

In recent months, ClearBridge has been actively engaging companies on workplace flexibility, encouraging them to make the most of this opportunity for change. While we recognize there is no one-size fits all approach, we ask all companies to think through the many impacts a partial shift to remote work could have on their workforce. Some topics we highlight with management teams are the impact of remote work on newer employees, mentorship and culture, and performance evaluations for remote workers. We believe companies that take a holistic and thoughtful approach to remote work can have a positive impact on their current workforce and attract more talent, particularly women and under-represented groups.

This bodes well for female employment in the future, and for GDP growth more broadly. If more companies offer remote and flexible work and there is less of a negative connotation associated with these benefits, a common reason many mothers leave the workforce will be eliminated. This should allow for more women to participate in the labour force, supporting faster GDP growth over time. Historically, there has been a strong relationship between changes in female labour force participation and trend GDP over the intermediate term (five years).

Exhibit 3: Female Labor Force Participation Correlates with Economic Growth

Data as of March 31, 2021. Source: U.S. Bureau of Economic Analysis, Bureau of Labor Statistics, Bloomberg.

In the near term, female labour force participation trends could also support more accommodative monetary policy. Last summer, the Federal Reserve concluded a review of their monetary policy framework, revising their stated goals to “emphasizes that maximum employment is a broad-based and inclusive goal. This change reflects our appreciation for the benefits of a strong labour market, particularly for many in low- and moderate-income communities.” In effect, this means that the Fed is likely to look beyond the headline unemployment rate when setting monetary policy in the coming years so long as inflation does not run away.

While the unemployment rate has recovered to 6.1%, it would be 7.2% if the female labour force had simply remained constant through the pandemic instead of shrinking by nearly 2 million. When setting policy, the Federal Reserve is likely to consider what a “normalized” unemployment rate looks like. Depending on the rate of women re-entering the workforce, the Fed could maintain easier monetary policy deeper into the economic cycle relative to history.

RIA 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.

When it issued a 10-year social bond in June 2020, raising $100 million as part of its new Social Debenture Program, the City of Toronto broke new ground. The Program, first of its kind in Canadian municipal circles, attracted considerable attention among ESG investors who were drawn in by the purpose of funding projects in areas such as affordable housing, basic infrastructure and access to essential services. The landscape in social finance now seems like it could enter another phase, this time courtesy of the federal government. Is the worldwide boom in social bonds coming to Canada?

As the country emerged from a pandemic that reframed priorities for a number of investors, the Government of Canada used its April 2021 budget to announce a consultation that will be sure to turn heads. “Social bonds are an opportunity to connect socially conscious investors with Government of Canada bonds that support social objectives such as reducing homelessness and improving access to high-quality early learning and child care,” the Department of Finance wrote in the budget documents. Therefore, it proposed “to explore the potential for social bonds to complement the government’s existing debt program,” committing to look into the topic “as part of the Debt Management Strategy consultations this fall.”

Social bonds have burst onto the scene like few asset classes in the past. According to one estimate by Linklaters, a British-based law firm, they raised $163 billion worldwide in 2020, increasing ten-fold from 2019. The increase was in large part due to vast needs brought on by the COVID-19 pandemic and its socio-economic impacts.

Here are a few examples:

• The European Commission, the dominant issuer so far, secured 17 billion euros when it created a social bond for its “Support to mitigate Unemployment Risks in an Emergency”. It did not go unnoticed: interest among investors was so strong that the issuance was met with demand exceeding 230 billion euros.
• Ghana announced in May that it will be issuing up to US$1 billion in debt under a mix of social and green bonds.
• Chile issued a 20-year social bond worth US$1.7 billion.
• Since March 2019, Australia’s National Housing Finance and Investment Corporation has issued about A$1.2 billion in social bonds.

What do social bonds look like?

The social bond market aims to finance or re-finance “social projects”, which “directly aim to address or mitigate a specific social issue and/or seek to achieve positive social outcomes,” the International Capital Market Association explained in its 2021 edition of the Social Bond Principles (SBP). The framework was designed to provide promote transparency and integrity for market participants. The SBP essentially provide a list of social needs that can be financed with bond proceeds while stating four “core components”:

• Use of proceeds
• Process for project evaluation and selection
• Management of proceeds
• Reporting

In addition, the Social Bond Principles recommend the appointment of an external reviewer to ensure the alignment of the core components and the bond, a step that can involve obtaining a specific certification or a rating. (The SBP point out that bonds that integrate social and green projects should be referred to as Sustainability Bonds and are covered by a different set of principles.)

At this point in the article, readers might ask themselves about prices and returns. How would social bonds stack up against run-of-the mill bonds should the federal government take this route? In the absence of a track record in the Canadian market, we feel that an attempt at answering this question might lead us to speculate. However, investing in fixed income is, ultimately, part of a larger portfolio strategy where return differentials within other asset classes can be much wider.

Navigating definitions

The fall consultation on social bonds won’t be the first time that Ottawa has asked for input on social finance. In 2018, a steering committee issued 12 recommendations to “unleash the potential of social innovation to address Canada’s most pressing social and environmental challenges”. While not specifically mentioning social bonds, the 2018 report did allude to “social impact bonds” (SIB), a different bond-like instrument that links the structure of payouts to the realization of certain outcomes.

As is sometimes the case with financial products that are constantly evolving, this is where things can get tricky. There are no clear-cut definitions or standards, but SIBs are generally understood to be based on a model where investors provide capital upfront for a social program or initiative. If the outcome meets or exceeds certain predetermined targets — audited by a third party — the issuer, often a government or other public entity, reimburses investors a prearranged sum.

According to the Brookings Institution, 194 social impact bonds were issued worldwide between 2010 and 2020, representing upfront investment of US$421 million. Countries with the most bonds created were the United Kingdom, the United States, the Netherlands, Portugal and Australia. So far, Canada has only seen a handful of SIBs, and the capital being raised is relatively tiny compared with the amounts observed in the wider “social bond” market seen in other parts of the world.

Anticipating the level of demand

All this raises a question: what would investor demand look like should the federal government move forward with social bonds? Time will tell. In the first quarter of 2021 alone, social bonds issued worldwide raised US$90 billion, according to recent data from Moody’s. One trying to predict the appetite in Canada might look at last year’s social bond issued by the City of Toronto. For the $100 million bond – sold at $99.98 for a 10-year yield of 1.602 % -, the City recently mentioned that « expressions of interest were in excess of $400 million, with strong interest from the environmental, social and governance (ESG) community.” In a world where COVID has made many investors keen to explore social-themed opportunities, line-ups could be just as likely.

RIA 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.