AIMCo’s approach to Responsible Investment (RI) is guided by our core values, our fiduciary duty to clients and a long-term investment horizon. AIMCo integrates environmental, social and governance (ESG) factors into investment analysis across all stages of investment decision-making. There is increasing evidence that ESG factors are material to the investment returns, especially when extrapolated out over the long term.
AIMCo’s RI governance structure cascades throughout the entire organization and across asset classes. The AIMCo board has ultimate oversight for RI, and reviews and approves the RI policy. The RI Committee is chaired by the CEO and features a cross section of senior executives representing all functional areas. The RI committee oversees RI investment strategy and activities, approving the AIMCo proxy voting guidelines, exclusions guidelines and engagement guidelines on an as-needed basis to allow for flexibility and adaptation to current trends.
AIMCo enhances shareholder value by exercising its proxy voting rights at publicly traded companies around the globe. Voting decisions are based on AIMCo’s bespoke proxy voting guidelines, and take unique circumstances and markets into account. These guidelines provide voting directives across six broad categories: board of directors, shareholder rights, management and director compensation, audit function, take-over protection and ESG reporting and disclosure. AIMCo employs a proxy voting service provider to exercise our proxy votes, while AIMCo’s RI team consider multiple proxy service advisory research inputs in addition to conducting independent research to inform our votes.
The RI Committee decides on the ESG focus areas for pro-active shareholder engagement. These are: Environment: Disclosure of mitigating strategies for companies whose operations have a high impact on the environment; Social: Worker health and safety across the supply chain, and Governance: Clear impediments to shareholder rights and alignment of investor and company interests.
The RI team considers whether to initiate and engage with the company to encourage positive change, and when to cease an engagement. In general, AIMCo prefers a strategy of ‘voice over exit’ with investee companies so as not to decrease the investible universe and to positively contribute to companies’ progress on ESG issues. Shareholder engagements may be initiated and carried out by AIMCo alone, or collaboratively, with peer institutional investment managers.
AIMCo is committed to reporting and disclosure of its RI policies, guiding documents and activities. AIMCo reports on RI in the annual report, on our website, in the United Nations Principles of Responsible Investment (PRI) survey, and to clients. The AIMCo voting record is disclosed on the AIMCo website in real time shortly after the vote has passed. AIMCo actively participated in a PRI pilot project in spring 2013 to redraft the PRI survey to make it more efficient and relevant.
AIMCo is an engaged member of the global RI community and is a signatory to a number of leading responsible investment initiatives, including the PRI, The Responsible Investment Association, The Canadian Coalition of Good Governance, and several others. AIMCo collaborates with peers in an effort to improve corporate governance and voting efficacy in our proxy voting system. AIMCo has two members on the Pension Investment Association of Canada (PIAC) corporate governance committee, one member on the PIAC board and one member on the International Corporate Governance Network (ICGN) shareholder responsibility committee.