COMMITMENTS
Several Power group companies have formalized their commitments through responsible investment or sustainability policies outlining their approaches to integrating ESG criteria in investment analysis and decision-making processes, and to enabling active ownership through engagement and proxy voting. These include IGM Financial’s subsidiaries IG Wealth Management and Mackenzie Investments, as well as GBL, Sagard and Power Sustainable.
In addition, many of our group companies are signatories to the Principles for Responsible Investment (PRI), including Irish Life Investment Managers, IG Wealth Management, Mackenzie Investments, GBL, Sagard and Power Sustainable. They are integrating ESG factors into their investment processes as a way to identify both risks and opportunities to enhance long-term returns for investors.
Finally, IG Wealth Management and Mackenzie Investments are members of the Responsible Investment Association (RIA).
ESG INTEGRATION
In recent years, IGM Financial and its operating companies strengthened their responsible business practices. For example, IG Wealth Management partners exclusively with asset manager sub-advisors who are also signatories to the PRI and share its commitment to sustainable investing. IG Wealth Management and Mackenzie Investments are members of Climate Action 100+, an investor-led initiative to ensure the world’s largest corporate GHG emitters take necessary action on climate change. For its part, Mackenzie Investments also prioritizes net-zero engagements with the 100 companies contributing to 70% of its aggregated financed emissions in listed equities. Mackenzie also has dedicated staff through the Sustainable Investing Centre of Excellence (COE), a dedicated team of experienced professionals who work to increase sustainable investing capabilities across Mackenzie. In 2024, Mackenzie’s Sustainability COE won the Climate Change Partner Award at the Institutional Connect Awards for its proactive climate change strategy and focus on stewardship and shareholder engagement.
Moreover, Mackenzie has expanded its suite of funds investing to directly support the transition to a low carbon economy. The sustainable investment funds allows investors to choose between funds and ETFs with different objectives: Sustainable Core investments allow for investments in industries, companies or issuers with progressive ESG practices, relative to their peers and are expected to enhance long-term returns; Sustainable Thematic investments that target certain ESG macro-trends or themes that are expected to generate competitive returns; and Sustainable Impact investments where the focus is on outcomes of ESG challenges or opportunities rather than on financial return.
Great-West Lifeco subsidiary, Irish Life Investment Managers (ILIM), also integrates ESG considerations into its investment processes. The company takes a thematic approach to responsible investing, one that is driven by two overarching macro trends: the move towards decarbonisation and the move to a more stakeholder-centric business model. To integrate these themes into its investment processes, ILIM has developed a proprietary investment framework to incorporate ESG and decarbonisation metrics into its investment process across its flagship ‘New World’ corporate fixed-income and equity investment solutions.
As for GBL, it believes that the integration of ESG factors at different steps of the investment analysis and management of its participation supports better risk-adjusted returns for its portfolio. As part of its engaged ownership approach with the companies in which it invests, GBL ensures through direct engagement with the companies’ governance bodies that they are managed in a manner consistent with its responsible management philosophy, including its Code of Conduct and ESG Policy. Considering the nature of its core business and its long-term investment horizon, GBL’s ESG integration process encompasses each of the following elements: investment universe definition; pre-investment phase due diligence; post- investment ESG integration and ongoing portfolio monitoring; voting and stewardship; and exit decision. GBL’s ESG integration process is reviewed on an ongoing basis. In 2024, GBL’s ESG integration process has been adapted to integrate CSRD/ESRS requirements.
ENGAGEMENT ACTIVITIES AND PROXY VOTING
IGM Financial's operating companies have formalized their commitments through sustainable investment policies, which outline the approach taken to integrate ESG criteria in investment analysis and decision-making processes and to enable active ownership through engagement and proxy voting.
IGM Financial’s subsidiary, Mackenzie Investments, is committed to being long-term stewards of capital and encourages the companies they invest in to adopt responsible practices. advancement of their climate action plan and sustainable investing is propelled through active engagement, ownership and advocacy efforts. The company takes a multifaceted approach to investor stewardship, which includes company-specific, programmatic and collaborative engagements, proxy voting and advocacy. Through proxy voting and engaging with these companies and issuers, Mackenzie Investments is able to highlight material ESG risks and opportunities that may impact an entity’s long-term performance. In 2024, Mackenzie engaged with 209 companies on 891 topics and implemented a proxy voting focused list of 92 companies.
In 2024, Mackenzie launched its inaugural proxy season review report, noting an improvement and rise in climate disclosures across companies, which Mackenzie attributed to enhanced regulatory requirements and growing interest from investors. The report also provided case studies illustrating Mackenzie’s approach to integrated stewardship, which seeks to create a cohesive strategy where engagement and proxy voting efforts are often interconnected. The integrated framework aims to ensure that insights gained from thematic engagements generally inform Mackenzie’s proxy voting research, and that outcomes of proxy votes generally drive further dialogue with companies.
Irish Life Investment Managers (ILIM) has developed a set of bespoke voting guidelines, the ILIM Global Proxy Voting Guidelines, which help ILIM make consistent voting decisions while taking the specific circumstances of a company into account. ILIM votes on shareholder meetings in line with the Global Proxy Voting Guidelines. Additionally, ILIM has its own Voting Policy and stewardship processes that are applied when making informed voting decisions. These decisions are derived from the assessment of internal and external research, data providers and our proxy voting agent, ISS. The company's voting in 2024 was in line with its four thematic priorities: climate-related risk, natural capital, human rights and corporate governance. It voted on 6,485 meetings and 63,259 resolutions, with ILIM supporting 60% of environmental, 75% social and 81% of governance related shareholder related resolutions.
Regarding engagement, ILIM has continued to enhance and expand its engagement program. The company engages directly with companies on the topics of net zero, climate change (transition and physical risks), biodiversity, water, waste management, human rights, supply chain, labour rights, anti-discrimination, diversity, anti-corruption, ESG risk, executive renumeration, and board independence. In 2024, ILIM conducted 370 engagements with 303 entities, either directly or collaboratively. Moreover, as part of the engagement activities in 2024, ILIM participated in 167 engagement meetings, either virtually or in-person, and sent more than 200 written communications.
ILIM has expanded its participation in collaborative engagements over recent years. The Stewardship Team has open discussions with peers and works closely with policy makers, different industry participants and non-governmental organizations to improve behaviours around sustainability. In 2024, ILIM played an increasingly active role in the collaborative engagements that it participated in. ILIM continued to play an active role in the CDP Non-Disclosure Campaign, expanding the number of companies that it led engagements on from 44 in 2023 to 105 in 2024. These engagements were on the topics of climate, water and forests. ILIM was also actively involved in engagements with seven companies as part of the Nature Action 100 initiative, participating in planning the engagement strategy, the agenda and meeting with the investee companies. As part of climate-related collaborations, ILIM also expanded the number of collaborative engagements it was involved in as part of the Net Zero Transition initiative with Morningstar Sustainalytics, complementing the initial set of engagements that were undertaken when the collaboration was launched in 2023. ILIM continued to participate in a fixed-income collaboration on deforestation as part of the Investor Policy Dialogue on Deforestation that focused on government bonds and involved engaging with the government of Brazil.
