This year we present the RBC Emerging Markets Equity team’s seventh ESG report.
ESG has been a key part of our philosophy and process since the inception of our strategy, and we have always strived to expand our knowledge and efforts in this space.
We have looked to invest in management teams that share this ethos, focusing on companies that promote a strong culture of excellence, which look to build strong relationships with all stakeholders and invest for the long term.
While we continue to have a significantly lower carbon footprint than the MSCI EM Index and many of our peers, this year we engaged with our portfolio companies on the topic of carbon emissions and net-zero.
We wanted to understand how management think about net-zero, the emissions they track and the targets they have in place. We have found the quality of third-party climate data to be limited, both within our portfolio and across the emerging markets (“EM”) region as a whole. Hence, doing our homework in this space is more important than ever.
Another area of discussion in this year’s report is on social factors (“S”). Within ESG, much of the focus historically has been on the environment (“E”) and governance (“G”). Social factors have received less attention and have generally been viewed as harder to define and measure. In the report, we look at the reasons behind this and why we feel this is likely to change. We also outline how we approach social factors when investing in companies.
This year we spent some time analysing the implications of rising inequality across EM through three key lenses: politics, technology and climate change. We believe that these themes will be key to understanding how inequality will evolve within EM in the coming years.
Engagement continues to be a critical part of our investment process. We provide some highlights of our activities as active owners over the course of the year. We also include case studies on what we consider to be exemplary ESG companies.
We hope that you enjoy these insights into our ESG activities and achievements, and we welcome any feedback on how we can improve our future efforts.
Read the full RBC Emerging Markets ESG report.