Comprehensive Investment Management for UBC's Investment Funds

Responsible Investing at UBC IMANT

IMANT’s Approach to Responsible Investing

As the investment manager for the University of British Columbia related funds, we place high importance on implementing the University’s commitment to Responsible Investing. Responsible Investing at IMANT incorporates:

  1. the fiduciary requirement to ensure that the financial requirements of all stakeholders are met
  2. sustainability through incorporation of best practices in Environmental, Social and Governance (ESG) considerations, and
  3. active ownership and engagement

We believe that responsible investing requires active and engaged ownership of investments to enhance long-term sustainability and improve the risk profile of the investment portfolios that we oversee. This document describes our approach to responsible investing and the integration of ESG criteria within our investment process across all asset classes.

Responsible Investment at IMANT is:

  • Maintaining our fiduciary responsibility
  • Incorporating ESG by including ESG considerations in investment decisions
  • Being active owners through:
    • Requiring external managers to evidence ESG incorporation in investment decision-making,
    • Requiring external managers to practice corporate engagement through proxy voting and direct contact,
    • Collectively engage with like-minded peers to influence industry groups and regulatory bodies to promote ESG incorporation, disclosure of ESG risks and promotion of responsible investing.

Responsible Investing

IMANT’s engagement efforts are guided by the direction provided by our clients, UBC and the UBC Staff Pension Plan. We assist our clients in formulating their responsible investing priorities through regular updates on best practices and ESG initiatives undertaken by the broader investment community.

We implement responsible investing:

  • by evaluating information that goes beyond traditional accounting data and
  • by active ownership evidenced through engagement with investment managers, with our peers in the investment community and with regulators

ESG Integration

UBC and IMANT believe that ESG considerations have the potential to impact investment risks and returns. As a manager-of-managers, IMANT strives to work alongside our external managers to analyze and understand threats and opportunities driven by environmental impacts, social considerations and governance structures. We actively seek to identify ESG threats and invest in opportunities driven by explicit and thoughtful considerations of environmental, social and governance matters.

Consequently, ESG criteria are among the key factors that inform investment decision making at IMANT. ESG integration is formalized in the UBC Responsible Investment Policy (link), IMANT’s Investment Beliefs and in the Statements of Investment Policies and Procedures governing individual investment pools.

The ESG criteria against which we evaluate in our process include:

  • Environmental concerns include (but are not limited to) air and water pollution, resource depletion, greenhouse gas emissions, deforestation and land use.
  • Social considerations encompass labour standards, workplace health and safety, diversity and consumer protection.
  • Governance practices cover shareholders rights, conflicts of interest, board structure, corruption and executive compensation.

Active Ownership & Engagement

Active ownership is a cornerstone of implementing responsible investing in practice. As a manager-of-managers we actively engage with external investments managers to provide us with evidence of ESG integration in investment decision-making. We evaluate our external managers on the steps that they take with respect to influencing responsible corporate behaviour through proxy voting and direct industry contact. Collectively, with other like-minded institutions we participate within organizations such as the Canadian Coalition for Good Governance (CCGG), Pension Investment Association of Canada (PIAC) etc. that promote responsible investing by influencing corporations, governments and regulators.

Transparency

Successful implementation of Responsible Investing depends on transparent disclosure of ESG data. Through its engagement with peer groups, IMANT supports efforts to have corporations provide investors ESG related information to improve the quality of institutional investment decision-making. IMANT also requires ESG updates from our external investment managers to ensure that ESG matters are continually incorporated in their investment decision making and that the managers actively engage with portfolio companies when needed.

Investment Exclusions

At IMANT, we believe that stakeholders are in a better position to affect change if they remain involved. Therefore, unless requested by our clients, we do not selectively exclude investments based simply on geography or industry sector.

Moreover, we support our clients in their decision-making process with respect to divestments by providing insights on industry best-practices as well as via estimates of the materiality of a divestment proposal on the overall risk/return profile of a portfolio.

Implementation

Since UBC Responsible Investing policy was formally adopted in 2013, IMANT ESG procedures have become more formal and more encompassing. IMANT reports its progress in implementing responsible investing in its Annual Reports. Key responsible investment initiatives undertaken by IMANT to-date are as follows:

  • As per the UBC Responsible Investment Policy, inclusion of ESG considerations is explicitly formalized in IMANT’s Statement of Investment Beliefs and in the policies and procedures of asset pools managed by IMANT.
  • ESG considerations are key criteria in identifying and selecting external investment managers.
  • ESG updates are included in manager reviews annually.
  • Public equity managers are required to provide proxy voting records.
    IMANT monitors managers’ participation in responsible investing organizations and initiatives.
  • External public equity managers selected by IMANT are independently evaluated for their ESG incorporation by external, independent ESG experts. External evaluations confirm IMANT assessments of ESG incorporation by external managers.
  • ESG reporting at IMANT has been expanded to include fixed income, private equity, real estate and infrastructure investments with initial results showing high levels of ESG incorporation and transparency by our managers in these asset classes.
  • Establishment of a new dedicated endowment pool with a goal of materially reducing CO2 emissions, avoiding investments in fossil fuel companies and delivering investments returns required to support the Endowment’s objectives. To date, this investment pool has delivered on its financial goals while reducing CO2 by over 80% compared to its benchmark.

See the UBC Finance website for additional information regarding the UBC Endowment’s Responsible Investment Policy.