Grand Canadian ESG Championship | Finance and Investment
The funds invited to participate in the competition were divided into three categories: listed shares and fixed income securities, which accounted for 61% of the submissions; alternatives (real estate, infrastructure, hedge funds, etc.), for 27% of submissions; very active, 12%. Climate change and equality, diversity and inclusion are clearly valued ESG topics given their system-wide nature.
Evaluation of documents for the final stage of the championship Millani Inc. and Normandin Beaudry firms, as well as nine institutional investors. Winners were awarded based on their funds’ financial and ESG performance and how well their strategies align with nine institutional investors’ ESG investment priorities.
The event was organized by nine institutional investors, including the Trottier Family Foundation, the McConnell Foundation, the Greater Montreal Foundation and two unnamed private trusts. It was an opportunity to welcome the ESG sector in full force, as ten years ago the niche strategy “is now a common investment strategy applied to more than 60% of assets under management in Canada and about 40% of the global market,” he said. said in the study.
The study also highlights two major projects that are ongoing but still need improvement. On the one hand, there is the tightening of regulations to reduce greenwashing and deceptive marketing, which is being done in Europe as well as in the US and Canada. On the other hand, implementation of standardized definitions, mandatory disclosure requirements for companies, ESG disclosure standards for investment products continues to be completed.
“We wanted the Grand Canadian ESG Championship to highlight best practices to increase the competitiveness of asset managers, while identifying and correcting gaps in the sector to fill,” explained Trottier Family General Manager Éric St-Pierre. Founder and organizer of the championship.
The championship was an opportunity to highlight some of the strengths of the Canadian ESG sector. First, internal ESG data and analysis systems do not rely solely on external providers. Then skills, experience and training were greatly enhanced.
Also, references to compensation and incentives for performance were noted as positive by a number of participants, but details were lacking to link this to impact on investment decisions. Finally, smaller investment firms delivered high-quality and sophisticated presentations despite fewer resources.
Only one notable weakness emerged during the year, said Daniel Simard, a management consultant at Aequo Shareholder Engagement Services Inc. While this demonstrates a certain level of commitment, internally developed tools are often a “black box”, thus complicating asset owners who need to validate the validity of the ESG assessment process. More transparency is needed. “.
A bit like the entire ESG sector, the championship was an opportunity to point out the lack of common goals, processes and priorities among the nine co-investors. Nevertheless, they agreed on two criteria to ensure consistency among all stakeholders. a) ESG integration: a clear and systematic review
environmental, social and governance factors in the investment decision-making process, from investment analysis to management activities. B) Impact: investments made with the aim of creating a concrete, positive and measurable social and/or environmental impact, in addition to a financial return.
At the end of the tutorial, we can see another shortcoming: no performance results of active funds and description of their composition and strategies were presented, and no comparison of performance with traditional format funds was presented. A call to Éric St-Pierre of the Trottier Family Foundation on the matter went unanswered.