Responsible Investing | ESG Investment
Your Investments Can Make A World of Difference
We live in an era where corporations are expected to be much more than simply profitable. We want and expect them to also care about key issues that are affecting the world around us, like protecting the environment and respecting human rights.
At IPC, we believe it’s important that the companies you invest in are good corporate citizens. So, through Counsel Portfolio Services, IPC Private Wealth, and IPC Portfolios, we are actively engaged with the companies we hold through our ESG (Environmental, Social and Governance) policy.
Not only is ESG important from a corporate citizenship perspective, it also has an impact from a risk management perspective. ESG policies can help investment managers more effectively manage evolving government regulations, which can often have a noticeable effect on markets and investment returns.
What is ESG?
ESG is a rapidly growing area of focus in the investment community.
ESG encompasses all the key components that determine whether a corporation is acting in an ethical and responsible manner as it relates to individuals, the environment, society, and the world as a whole.
Environmental
This area is focused on any activity or ensuing negligence that results in harmful effects on the natural environment. Issues include hazardous waste, carbon emissions, energy consumption, water management and the protection of natural habitats.
Social
Situations that affect the welfare of a company’s employees, customers, suppliers, or the public at large are identified. Issues include employee safety, labour rights, workplace conditions, where and how supplies are sourced, plus how communities are impacted and how consumer relations are managed.
Governance
Assessing governance involves determining whether or not a company operates in a responsible manner. Issues include the independence of its board, whether executive compensation reflects shareholder interests, anti-corruption measures, and suitable accounting and audit practices.
Our Three Pillars for ESG
Active Ownership
We approach responsible investing through a model that involves active ownership. This means that we actively work on influencing the ESG behaviour of companies we own, when we deem that improvement is needed. This approach aims to make a difference in the way all companies respect the environment, society, and their shareholders. We practice active ownership with the companies we own through our proxy voting activity and corporate engagement.
Integration
We encourage our investment specialists to identify, monitor and manage ESG risks and opportunities that are, or could become material to long-term performance. We also expect them to understand and recognize the impact and importance of ESG factors across industries, geographies, and time and to include these in their investment policies and processes. Reviewing ESG integration is part of our regular due diligence meetings with our investment specialists. We also evaluate the ESG integration practices for any potential new investment specialists.
Exclusions
Our newest ESG pillar is the exclusion of certain investments - companies that we won’t invest in for ethical reasons. This list includes:
- Controversial Weapons – We do not invest in companies involved in the production, use or distribution of Anti-Personnel Land Mines or Cluster Munitions. We expanded this exclusions list to now include companies with verified involvement in weapons such as Depleted Uranium, Nuclear Weapons, Chemical Weapons, Biological Weapons, Incendiary Weapons and White Phosphorus Weapons.
- Tobacco – We exclude companies in this sub-sector whose business primarily (that being 50% or more) involves the manufacture and distribution of tobacco products.
- Thermal Coal Mining – We exclude companies that derive 30% or more of their revenue from this practice.
- Thermal Coal Power Generation – We also exclude companies where 30% or more of their power generation output is derived from the use of coal.
IPC Private Wealth Investors
As an IPC Private Wealth investor, you can choose to have greater control when it comes to investing in the securities of specific companies. If there are securities of a specific company(s) that you would prefer to not to invest in, your portfolio can be constrained to exclude them from the stock positions your directly hold.
Learn how our ESG principles are applied to IPC Private Wealth portfolios.
Getting the Best of Both Worlds
As an individual investor, you want an investment portfolio designed to reach your financial objectives and life goals. As a member of the larger community, you also want to invest in companies who are held accountable to certain ethical standards.
Our approach to responsible investing gives you the best of both worlds.
We have the freedom to seek investment opportunities wherever they may be while at the same time influencing the environmental, social and governance practices of companies at home and around the globe.
