Environmental
How does the issuer interact with their environment, and vice versa?- Air and water pollution
- Biodiversity
- Climate Change
- Ecosystem integrity
- Natural resource management and use
- Waste management
- Water quality and availability
Social
How does the issuer interact with its employees, customers, and communities?- Community relations
- Data privacy and security
- Employee engagement
- Gender and Diversity
- Health and Safety
- Human rights
- Indigenous rights
- Labour practices
Governance
How does the issuer govern itself?- Board structure and independence
- Bribery and corruption
- Executive compensation
- Lobbying and political contributions
- Shareholder rights
- Tax strategy and accounting standards
1. Investment-led
Our investment teams have developed their own methods to integrate material ESG factors into their respective investment analysis and decision-making processes for applicable types of investments. This approach allows our investment teams to tailor the ESG integration tools and resources to their distinct investment methodologies. The ESG integration activities undertaken by each team are intended to reflect the best interests of our clients and the time horizon of their investment strategies.2. Focuses on materiality
Our investment teams focus on those ESG factors that they have determined may impact the value of the investment. The extent of these impacts depends on the issuer, the industries and geographies in which it operates, and the nature of the investment strategy for which it is purchased.3. Continuously improves and innovates
The culture at RBC GAM revolves around innovation, continuous learning, and harnessing the power of human and machine. Our investment teams explore new and, in our opinion, improved ways to integrate material ESG factors into their investment approaches. Some of our continuous learning initiatives include: firm-wide ESG education sessions with external experts and speakers; internal ESG research on emerging data, themes, tools, and methodologies; an internal ESG network where our investment teams share perspectives on ESG topics; and a monthly internal newsletter on new developments in responsible investment.ESG integration in action
Our investment teams select the ESG tools and processes that work best for their investment decision-making processes4. However, there are some commonalities in how our investment teams consider ESG factors within asset classes. For example, good corporate governance practices are important for all of our investments across all industries and markets.
We believe that companies with good corporate governance structures are: better able to focus on the company’s long-term, sustainable growth; pose less risk for shareholders due to proper alignment of management and shareholder interests; are more likely to issue fixed income instruments with higher credit quality and lower credit risk; and are more likely to effectively manage the company’s environmental and social factors. Learn more about other aspects of ESG integration within asset classes at RBC GAM here.
4 Certain investment strategies or asset classes do not integrate ESG factors, including but not limited to money market, passive and certain third-party sub-advised strategies.
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