Post on 13-May-2020
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Classification: only to be shown if not public
Nina Roth
Director, Analyst,
Responsible Investment
ESG
engagement
For professional investors only
Self-signoff
April 2019
Classification: only to be shown if not publicAbout BMO Global Asset Management
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Source: BMO Global Asset Management as at 15-Mar-19. ESG = Environmental, Social and Governance.
• Launched Europe’s first social and environmentally screened Fund in 1984.
One of the largest Responsible Investment teams in EuropeLeadership
Global coverage
In-house expertise
Engagement
• Dedicated Responsible Investment team (16 in total) conducting ESG
analysis, proxy voting and engagement
• Experienced, well resourced, active global equities team with extensive
fundamental research capabilities and risk management
• Engaged 665 companies in 2018
A history of innovation in Responsible Investment…
1984
Launch of
Stewardship
Growth –
first ethical
portfolio
in UK
1987
Launch of
Stewardship
Income &
Stewardship
North American
portfolios
1998
Stewardship
North America
becomes
Stewardship
International
portfolio
2000
Launch of
Responsible
Engagement
Overlay
(reo®)
2006
Founding
signatory to
Principles for
Responsible
Investment
(PRI)
2007
Launch
of Ethical
Bond
portfolio
2010
Launch of
Emerging
Markets
ESG
Strategy
2012
Launch
of ESG
Risk Tool
2016
Launch of Green Bond
Strategy and BMO
Responsible Global
Equity Strategy ESG
Profile and Impact
Annual Report
2018
Launch
of BMO
Responsible
Euro Credit
portfolio
2019
Launch
of BMO SDG
Engagement
Global Equity
portfolio
Classification: only to be shown if not publicWhat is responsible investment?
Social• Labour standards
• Human rights
• Health and safety
Environmental• Climate change
• Water management
• Pollution
Governance• Executive pay
• Business ethics
• Corporate governance
Responsible Investment is an approach to investing that aims to incorporate environmental,
social and governance (ESG) factors into investment decisions, to better manage risk and generate
sustainable, long-term returns. UN Principles for Responsible Investment”
“
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Classification: only to be shown if not publicApproach to engagement
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• Engagement focuses on encouraging companies to address material environmental, social and
governance issues, with a view to reducing risk and supporting long-term performance
• We use constructive confidential dialogue, typically working one-to-one with companies, but taking
a collaborative approach where this has more impact
• Effective engagement requires:
– A deep understanding of how ESG issues impact mainstream business strategy
– The building of long-term relationships with companies
– Local/regional knowledge and context
– Access to management and Board
• Where engagement is not effective, we may use a range of escalation strategies:
– Escalating from management to Board level
– Bringing collaborative investor pressure to bear
ESG = Environmental, Social and Governance.
Classification: only to be shown if not publicEngagement prioritisation
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Top DownBottom-up Event-driven
THEMATIC
ENGAGEMENT
Engagement with
companies to improve
practices in specific
themes
PRIORITY
COMPANIES
Frequent engagement
with companies with
significant ESG risks
REACTIVE
ENGAGEMENT
AGMs, controversies
and UN Global
Compact breaches
Classification: only to be shown if not public
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In addition ➔ 66 priority companies, covering 19 countries
Source: BMO Global Asset Management as at 01-Jan-19.
Thematic projects 2019: five key focus areas
Gender equality
• Diversity best practice in senior
management (new)
Climate change
• Climate Action 100+ (ongoing)
• Sustainable banking in ASEAN
banks (new)
• Marine transportation (new)
Biodiversity and water
• Ocean plastics (ongoing)
Also ongoing:
Disclosure at mid-cap companies, Nutrition,
US governance
Protecting vulnerable workers
• Living wages in the retail
sector (new)
• Modern slavery (ongoing)
• Sustainable sourcing for
apparel (new)
Antimicrobial resistance
• Pharmaceutical sector response to
antimicrobial resistance (new)
Classification: only to be shown if not publicProject highlight: sustainable banking in ASEAN banks
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• Sustainability strategy
– Senior leadership
– Roles, responsibilities, reporting lines
– Staffing
• Environmental & social risk management
– Detection, analysis, mitigation, monitoring
– Policy development for key risk areas
• Thematic focus:
– Climate change: identifying key portfolio risks/exposure to climate change effects
– Palm oil: development of dedicated policy, incl. no deforestation, no peat, human rights)
• Transparency:
– AR/CSR/Sustainability/online reporting
– TCFD reporting
Classification: only to be shown if not publicCollaborative engagement – 2019 (selection)
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‘Systemically
important emitters’:
improving governance,
curbing emissions and
strengthening climate-
related financial
disclosure.
Palm oil:
producers,
traders, retailers &
banks to develop
and disclose
NDEP policies.
Deforestation
(soy, cattle).
Living wage:
improving data on
how companies
manage workers in
their direct
operations and
supply chains.
Gender diversity:
broaden the pipeline
of women at all levels
of organisations;
board appointments.
Classification: only to be shown if not public
APPENDIX
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Classification: only to be shown if not publicESG standards of our responsible strategies
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*Responsible Global Equity strategy.
Screening criteria
• Technological innovation
• Healthcare
• Responsible finance
• Sustainable mobility
• Resource efficiency
• Energy transition
• Human rights
• Labour standards
• Product safety
• Animal testing and welfare
• Responsible sales and marketing
• Bribery and corruption
• Compliance and ethics
• Climate change
• Biodiversity loss
• Waste management
• Water consumption
• Alcohol
• Fossil fuels
• Fur
• Gambling
• Genetic modification
• High interest rate lending
• Nuclear energy
• Pornography, harmful and violent materials
• Transport
• Tobacco
• Toxic chemicals
• WeaponsPositive themes*
Classification: only to be shown if not publicDisclaimer
Views and opinions have been arrived at by BMO Global Asset Management and should not be
considered to be a recommendation or solicitation to buy or sell any products that may be mentioned.
Classification: only to be shown if not publicContact us
Extensive worldwide investment capabilities
• Total focus on clients
• Comprehensive range of products
and solutions
• Defined expertise – including a suite of specialist
investment boutiques
BMO Global Asset Management (EMEA) – Head OfficeExchange House
Primrose Street
London EC2A 2NY
Tel: +44 (0) 20 7628 8000
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