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OPTrust

PRI reporting framework 2017

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You are in Indirect – Manager Selection, Appointment and Monitoring » Overview

Overview

SAM 01. Role of investment consultants/fiduciary managers

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation uses investment consultants and/or fiduciary managers.

01.7. Additional information [Optional].


SAM 02. RI factors in selection, appointment and monitoring across asset classes

02.1. Indicate for which of the following externally managed asset classes your organisation, and/or your investment consultants, consider responsible investment factors in investment manager: (a) Selection, (b) Appointment (investment management agreements/contracts), and (c) Monitoring

Select all that apply

Asset classes

(a) Selection

(b) Appointment

(c) Monitoring

Listed equity

Fixed income - SSA
Fixed income - Corporate (non-financial)

Private equity

Property

Infrastructure

02.2. Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes.

Through 2016, OPTrust accessed public markets through external management. ESG factors are integrated throughout the manager search, selection and monitoring processes. The external managers are expected to demonstrate an understanding of ESG issues and explain how these issues are integrated into their decision-making process. We monitor the managers' portfolios to identify companies that may have exposure to financial, reputational or other risks arising from ESG issues. The results of these reviews are used to engage the investment managers and to evaluate the effectiveness of each manager in integrating ESG factors. External managers are required to adhere to the SRIP, which is mandated in their investment contracts.

When the Private Equity and Infrastructure teams conduct manager selection, appointment and monitoring, our teams look at past portfolios and identify any ESG concerns. Deal teams are responsible for flagging any initial issues at the screening stage and then detailing, at the investment decision stage, how these issues were mitgated.

The Real Estate Group ("REG") has integrated ESG matters in its investment underwriting, portfolio management and manager selection process. The REG's comprehensive due diligence questionnaire - completed by external managers - incorporates a dedicated section on ESG issues. The REG formally advises its potential partners and managers as to our approach to ESG. A section is included in all investment summaries for all new investments confirming that the REG has examined and identified any ESG-related risks. Should a potential material risk be identified, the issue is brought to the attention of the CIO (with the potential to be escalated to the CEO) who then works with the REG to determine if the potential risk is manageable or can be mitigated. The REG also continuously monitors its external managers and will take appropriate action as necessary.

02.3. Additional information. [Optional]


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