Sustainable Investing - IPC Counsel Portfolio Services
Sustainable Investing - Your investments can make a world of difference.
It’s important to us that the companies we invest in on your behalf are good corporate citizens. At Counsel Portfolio Services, our sustainable investing approach promotes positive ESG (environmental, social and governance) policies at the companies we hold.
WHAT DOES ESG INVOLVE?
ESG is a rapidly growing area of focus in the investment community. It encompasses all of the major factors that determine whether a corporation is acting ethically and responsibly towards individuals, society and the world.
Environmental
Includes activities or negligence that result in harmful effects on the natural environment. Issues include hazardous waste, carbon emissions, energy consumption, water management and protection of habitats.
Social
Situations that affect the welfare of a company’s employees, customers or suppliers are identified. Issues include employee safety, labour rights, conditions of workplaces where supplies are sourced, how communities are impacted and how consumer relations are managed.
Governance
Assessing governance involves whether or not a company operates in a responsible manner. Issues include independence of its board, executive compensation reflecting shareholder interest, anti-corrupt ion measures, and proper accounting and audit practices.
Our ESG strategy allows us to think about the role of ESG factors in driving real-world outcomes. As ESG issues – and climate change in particular – climb up government agendas, regulation will have a growing influence on the market. Many voluntary guidelines are becoming mandatory.
So ESG isn’t just about taking a social stance on an issue, it is an important risk management exercise. In other words, ESG is now table stakes for investment managers.
Three Pillars of Sustainable Investing at Counsel
Our sustainable investing approach is driven by three pillars:
1. Active Ownership
We practise active ownership through voting activity and corporate engagement.
Voting Activity
As shareholders of the companies we invest in, we are eligible to vote on high-level corporate actions, including board of directors’ slates, and we use these voting rights to support ESG issues.
Corporate Engagement
On Corporate engagement, communication with specific companies is managed on our behalf by ISS ESG, a leading firm in the field, whose analysts monitor policies and practices of the companies we invest in.
Engagement focuses on companies that are assessed to be involved in alleged or verified failures to respect international norms around human rights, labour rights, the environment and business practices.
2. Integration
The second ESG pillar is the integration of ESG with our investment specialists.
We encourage our investment specialists to identify, monitor and manage ESG risks and opportunities that are, or could become, material to long-term performance and understand and recognize that the importance of ESG factors varies across industries, geography and time.
3. Exclusion
Our newest ESG pillar is the exclusion of certain investments.
- Controversial Weapons – As part of the commitment by the broader Power Financial group of companies, of which we are a part, we do not invest in companies involved in the production, use or distribution of anti-personnel land mines or cluster munitions. We are now expanding this exclusion list to include companies with verified involvement in weapons such as Depleted Uranium, Nuclear Weapons (in violation of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) entered into force in 1970), Chemical Weapons, Biological Weapons, Incendiary Weapons and White Phosphorus Weapons.
- Tobacco – We are excluding companies within the Tobacco sub-sector whose business is primarily – that being 50% or greater – the manufacture and distribution of tobacco products.
- Thermal Coal Mining – this excludes companies that derive 10% or greater of their revenue from thermal coal mining
- Thermal Coal Power Generation – the exclusion of companies whose power generation output is derived from 20% or greater from the use of coal
HAVING THE BEST OF BOTH WORLDS
You want an investment portfolio designed to reach your financial objectives and life goals. As a member of the larger community, you want to invest in companies that are held accountable to certain ethical standards.
Our sustainable investing approach gives you the best of both worlds. We have the freedom to seek investment opportunities, wherever they may be while influencing ESG practices of companies at home and globally.
Download our Sustainable Investing Policy