As a manager of manager, we do not generally select individual companies or investments, our Responsible Investing (RI) activities are primarily focused on sub-advisor selection and monitoring of their RI practices.
Our sub-advisors may use a combination of quantitative and/or qualitative Environmental, Social, and Governance (ESG) factors, spanning multiple themes within each of the three categories. The table below shows examples in each category.
Environmental |
Social |
Governance |
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Each sub-advisor may have different views on what constitutes positive, negative or material ESG considerations and each sub-advisor may have a different ESG assessment of an issuer, sector, industry, or geography.
We have a responsibility to our funds and clients who trust us to act with honesty, in good faith and always in their best interest. This responsibility is the foundation for all our investment activities. Factors such as regulatory change, the risk and opportunities associated with climate change, cybersecurity, workforce safety, and other matters are potential business issues – issues which can have a material financial impact on companies and non-corporate entities.
Our assessments include consideration of a sub-advisor’s approach to RI and focuses on three key pillars:
- their firm-wide commitment,
- the implementation of Environmental, Social, and Governance (ESG) considerations as part of their strategy, where and as appropriate, and
- their approach to active stewardship.
These three pillars allow us to better understand where a sub-advisor is on their ESG or sustainability journey. Individually, each pillar can allow us to identify a sub-advisor’s strengths and weaknesses.
Instead of focusing on an aggregate external assessment, or leveraging/analyzing external ratings, we look across a broad range of criteria independently that fall under our three main pillars.
Our proprietary framework strives to use qualitative and quantitative information, where possible. Considerations include whether the firm has/is:
- Put in place an executive-led governance and oversight structure
- Working towards solidifying existing data and support systems
- Educational initiatives that serve to develop their capacity
- Fostering a culture of collaboration
Their firm-wide initiatives normally feed into individual teams, often providing insights at the strategy-specific level.
Our expectations ultimately depend on the nature of the investment strategy. What we seek is a sub-advisors' commitment to building capacity to adapt to an ever-evolving landscape. What matters is our conviction that they are likely to continue to deliver in accordance to our expectations, and through time.
As for our activities, we do expect them to initially complete a comprehensive Request for Proposal and then an annual questionnaire once onboarded. We also expect them to respond to any of our thematic probes and ad-hoc queries, as well as meet with us on a rotational basis on what we refer to as a Responsible Investing (RI) Deep Dive. These RI Deep Dives are informal sessions that address material changes or developments and/or emerging themes. All of these activities serve to allow us to better understand their direction of travel as it relates to RI.
Our engagements serve two main purposes. We aim to gain a deeper understanding of a sub-advisor's journey and learn from their observations and experiences. Although we recognize that each and every sub-advisor faces its own challenges, some not fully within their control, we aim to share our insights whenever we believe they may prove valuable.
Yes. We participate in cross-business committees and provide comments on various industry initiatives and consultations. We also take part in educational initiatives such as webinars to raise awareness of our believes, approach, and more.
In 2014, Sun Life signed the Principles for Responsible Investment (PRI), and as a member of the Sun Life group of companies, we also endorsed the PRI principles. In 2021, SLGI Asset Management Inc. became a member of Responsible Investment Association. In 2022, SLGI Asset Management Inc. became a signatory to the PRI as an investment manager, demonstrating our commitment to Responsible Investing. As well, we joined the Institutional Investors Group on Climate Change (IIGCC) in 2022.
The SLGI AM Board of Directors provides oversight, while the day-to-day implementation of our Responsible Investing (RI) strategy is delegated to the firm’s Leadership Team. The SLGI Sustainability Committee helps set its priorities and goals, and reports as necessary. Dedicated personnel on our Multi-Asset Solutions Team focus on RI initiatives and activities and include the Head of Responsible Investing & Manager Research, and Director of Responsible Investing. They work in consultation with Sun Life’s International Investment Centre on certain activities and report their findings to the SLGI Investment Oversight Committee on a quarterly basis.
Information contained in this article is provided for information purposes only and is not intended to provide specific financial, tax, insurance, investment, legal or accounting advice and should not be relied upon in that regard and does not constitute a specific offer to buy and/or sell securities. Views expressed regarding a particular company, security, industry, or market sector should not be considered an indication of trading intent of any mutual funds managed by SLGI Asset Management Inc. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell. These views are subject to change at any time based upon markets and other conditions and we disclaim any responsibility to update such views.
Please note, any future or forward-looking statements contained in this article are speculative in nature and cannot be relied upon. There is no guarantee that these events will occur or in the manner speculated. Please speak with your professional advisors before acting on any information contained in this article.
