Environmental
How does a company act as an environmental steward?- climate change
- greenhouse gas (GHG) emissions
- resource depletion, including water
- waste and pollution
- deforestation
Social
How does a company treat employees, customers & communities?- working conditions, including slavery and child labour
- impact on local communities, including indigenous communities
- conflict
- health and safety
- employee relations and diversity
Governance
How does a company govern itself?- executive pay
- bribery and corruption
- political lobbying and donations
- board diversity and structure
- tax strategy and accounting standards
1. Research and analysis
Our Responsible Investment group ensures that our investment teams have access to research on the ESG issues they consider material. Our investment teams integrate material ESG factors into their investment decisions for applicable types of investments1. We believe this contributes to an enhanced analysis of issuers and a better understanding of the risks and opportunities facing them.2. Direct engagement
Direct engagement refers to communication between investors and the board or management of the issuer on material ESG issues. Its purpose may be to better understand an issuer's approach to material ESG issues or it may be to encourage the issuer to adopt better practices, including improved ESG-related disclosure and/or more effective identification and management of material ESG issues2.3. Proxy voting
Voting our shares responsibly is part of our fiduciary duty and we make our voting decisions independently, in accordance with our custom Proxy Voting Guidelines3. The RBC GAM Voting Guidelines are updated annually to reflect our views on emerging trends in corporate governance and responsible investment, providing an overview of the corporate governance principles we support and how we will generally vote on ESG-related issues.4. Collaboration
When appropriate, we work together with like-minded investors, either directly or through organizations/coalitions, to allow us to have greater influence on issues specific to our investments and on broader, market-wide considerations. In either case, we work to encourage changes that are in the best interests of our clients. Learn more about our responsible investment commitments.5. Engaging with regulators and lawmakers
As a firm, we engage constructively with regulators and other lawmakers to ensure the shareholder perspective is heard when changes to laws or regulations are being considered.1 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.
2 In certain instances involving quantitative investment, passive and certain third-party sub-advised strategies, there is no direct engagement with issuers by RBC GAM.
3 The RBC GAM Proxy Voting Guidelines are applied for companies based in Canada, the United States, the United Kingdom, Ireland, Australia, and New Zealand. In all other markets, RBC GAM utilizes the local proxy voting guidelines of Institutional Shareholder Services.
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.