As a long-term and active investor, Power Corporation believes that value can be best achieved when environmental, social and governance (ESG) considerations are integrated into our investment process.
As part of our active ownership approach, we recognize that the effective management of ESG factors can have a positive impact on the Corporation’s profitability, long-term performance and ability to create value in a sustainable manner.
We view responsible investing as a means to mitigate potential risks and identify valuable investment opportunities. Responsible investing ensures we invest in quality companies that have sustainable franchises and attractive growth prospects, and that are managed in a responsible manner.
ESG Factors We Consider:
Ethics and Integrity
Robust Corporate Governance Framework and Practices
Anti-Corruption and Anti-Bribery
Data Privacy and Security
Biodiversity and Conservation
Health and Safety
Diversity and Inclusion
- Continued to engage with our group of companies and investments on ESG issues through our active ownership approach.
Highlights from our Group Companies
IG Wealth Management, Mackenzie Investments and Investment Planning Counsel have all formalized their commitments through Responsible 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.
Many of our group companies are signatories to the Principles for Responsible Investment (PRI) - including Great-West Lifeco subsidiaries GLC Asset Management Group (GLC), Putnam Investments and Irish Life Investment Managers, and IGM Financial subsidiaries IG Wealth Management and Mackenzie Investments - which are integrating ESG factors into their investment processes as a way to identify both risks and opportunities to enhance long-term returns for investors. In 2018, Groupe Bruxelles Lambert (GBL) also became signatory to the PRI, furthering its commitment to pursue the development of its responsible investment approach.
GLC has joined the Responsible Investment Association (RIA) to help support their work in promoting responsible investment literacy as well as their advocacy efforts to shift public policy and regulation towards frameworks that are more conducive to responsible investing. IG Wealth Management and Mackenzie Investments are also members of the RIA.
Sagard Europe, Sagard Holdings and Sagard China, Power Corporation’s investment funds, as well as Pargesa and GBL, have formalized their commitment to incorporate ESG considerations into their investment analysis process through their respective CSR Statements.
At Mackenzie Investments, ESG factors are considered as part of the investment process, recognizing the relative importance of ESG factors varies across industries, geography and time. In analyzing the risks of investments in actively managed internal mandates, the company’s investment managers look to identify, monitor and mitigate ESG risks and opportunities that are, or could become, material to long-term performance. It also engages sub-advisors to promote the inclusion of ESG factors into their investment processes, policies and practices where these are not employed today.
At IG Wealth Management and Investment Planning Counsel, the investment due diligence processes seek out sub-advisors whose investment processes require them to exercise professional judgment regarding material drivers of value. Sub-advisors are encouraged to identify, monitor and mitigate ESG risks and opportunities that are, or could become material to long-term performance. The companies also promote the inclusion of ESG factors into their investment policies and processes where these are not employed today.
ESG aspects are embedded at all stages of GBL’s investment process, including the assessment of investment opportunities and the due diligence phase, and of the monitoring carried out on participations of the portfolios. GBL believes in widespread workforce engagement to ensure proper integration of its ESG strategy, implementing its portfolio monitoring activities also translates in trainings given to all professionals and/or specifically to its investment team. Accordingly, over the 2017-2018 period, GBL’s employees involved in the investment process and portfolio monitoring participated in the annual ESG awareness training.
Irish Life Investment Managers has established a Responsible Investment Governance Committee, comprising key members of the Executive Team, Fund Management, Operations and Client Servicing teams with the responsibility to ensure the adherence to its Responsible Investment policy. Irish Life Investment Managers works with external providers to analyze its portfolio companies to identify those with the highest exposure to ESG risks and understand how these risks are being managed, and also to get support with regard to its engagement activities. Since the inception of its engagement program, Irish Life Investment Managers has contacted 116 companies with the objective to work with them to improve their overall performance across six themes: bribery, climate change, ESG risk management, human rights, supply chain labour standards and water.
Putnam's Sustainable Investing team manages two strategies that integrate fundamental equity research with analysis of relevant sustainability issues. The team also generates independent, in-depth research on specific ESG issues. Its analysts have deep fundamental understanding of how to utilize ESG data within the relevant context of each company and industry, and they share insights across Putnam's global research platform.
Anchored by its Responsible Investing Policy and its Engagement Policy, GLC is committed to taking ESG factors into consideration in its investment decisions and to engage with its portfolio companies on a range of relevant ESG subjects. By joining the RIA, GLC further formalized its belief that integration of ESG factors into the selection and management of investments can provide strong risk adjusted returns and positive societal impact.
Building on its CSR Statement, Sagard Europe further formalized its ESG commitment and procedures, taking into account ESG factors throughout the entire investment cycle, from the acquisition phase through portfolio management, to divestment, raising its employees’ awareness of ESG issues in parallel. For instance, for majority investments, Sagard Europe works with external service providers to perform an ESG due diligence, systematically reviews ESG assessments at Investment Committee meetings and conduct an annual review of ESG action plan.
ACTIVE OWNERSHIP/PROXY VOTING
IGM Financial’s approach to active management of its investments includes engagement with company management as well as proxy voting, which are important value-added practices within the investment processes employed by its investment funds.
The objective of ESG-focused engagement is to understand an investee company’s position, actions taken to date, and any additional actions to be taken (or not taken). In addition, IGM generally adopts a policy of engagement over divesting a holding, believing that ownership, rather than divestiture, enables them to contribute positively to the investee companies’ ESG progress. Since 2018, Mackenzie Investments partners with a premier global engagement service provider who supports it in its engagement efforts with the companies in which it invests.
IGM Financial ensures that its internal managers and sub-advisors have appropriate policies to vote proxies in the best interests of its investment funds. Investment Planning Counsel also partners with an ESG engagement firm to advise on proxy votes and to engage companies in its portfolios on material ESG issues.
Irish Life Investment Managers monitors company boards for their performance on ESG issues and independence and have adopted a voting policy that promotes positive ESG policies and disclosure in the companies in which it invests.
GLC believes that proxy voting is a valuable tool in propagating a focus on ESG factors and their importance in investment decisions. GLC recognizes the impact these factors have on investment performance and believe appropriate management of the related risks position firms positively compared to peers. As a result, GLC will generally vote for proposals that enhance sustainability, and by extension, the profitably, of companies.