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RBC Global Asset Management

PRI reporting framework 2017

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Implementation not in other modules

SG 12. ESG issues in strategic asset allocation

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

12.1. Indicate if your organisation executes scenario analysis and/or modelling in which the risk profile of future ESG trends at portfolio level is calculated.

12.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

12.3. Additional information. [OPTIONAL]

Our strategic asset allocation process is not designed to incorporate granular factors such as ESG issues, and tends to focus on macro shifts in market conditions over the short and medium-term.  As such we consider ESG factors to be most relevant to individual companies, and in some instances, for certain sub-sectors.


SG 13. Long term investment risks and opportunity

13.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following you act on.

13.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

other description

          We have also exercised our proxy voting rights in favour of companies improving their disclosure of emissions data.
        

13.3. Indicate which of the following tools you use to manage emissions risks and opportunities

other description

          Several of our investment teams (our Global and Canadian Equity teams) engage with companies on emission risks.
        

13.5. Additional information [Optional]

In 2016 we nade avaialble to investors in the U.S. and Canada a global equity fossil-free strategy, and we are considering developing one or more additional fossil-free strategies for clients who want to limit their exposure in this regard, in particular a fixed income fossil-free strategy.


SG 14. Allocation of assets to environmental and social themed areas

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

14.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

14.2. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

0.1 % of AUM

Brief description and measures of investment

RBC GAM's Access Capital Community Investment Strategy is an investment solution offered through our U.S. operations to clients in the U.S. Access Capital aids underserved communities while seeking to earn a market rate of return through the support of low and moderate income home buyers, affordable rental housing units, small business administration loans and economic development projects.

Investments must serve a low to moderate income family or community; home owners who earn 80% or less of the area-median income or multi-family rental housing that is 51% or more subsidized; nursing homes that serve a high percentage of medicare patients; small business loans in low to moderate income census tracks; or taxable municipal bonds that serve low to moderate income communities or populations.

0.1 % of AUM

Brief description and measures of investment

RBC GAM's Access Capital Community Investment Strategy is an investment solution offered through our U.S. operations to clients in the U.S. Access Capital aids underserved communities while seeking to earn a market rate of return through the support of low and moderate income home buyers, affordable rental housing units, small business administration loans and economic development projects.

Investments must serve a low to moderate income family or community; home owners who earn 80% or less of the area-median income or multi-family rental housing that is 51% or more subsidized; nursing homes that serve a high percentage of medicare patients; small business loans in low to moderate income census tracks; or taxable municipal bonds that serve low to moderate income communities or populations.

0.1 % of AUM

Brief description and measures of investment

RBC GAM's Access Capital Community Investment Strategy is an investment solution offered through our U.S. operations to clients in the U.S. Access Capital aids underserved communities while seeking to earn a market rate of return through the support of low and moderate income home buyers, affordable rental housing units, small business administration loans and economic development projects.

Investments must serve a low to moderate income family or community; home owners who earn 80% or less of the area-median income or multi-family rental housing that is 51% or more subsidized; nursing homes that serve a high percentage of medicare patients; small business loans in low to moderate income census tracks; or taxable municipal bonds that serve low to moderate income communities or populations.

          RBC Fossil Fuel Free Global Equity strategy
        
0.1 % of AUM

Brief description and measures of investment

RBC GAM launched the RBC Fossil Fuel Free Global Equity strategy in 2016. This is the first sustainability-themed strategy we have launched. The strategy will not invest in issuers or vehicles that include issuers directly involved in extracting, processing or transporting coal, oil or natural gas, or issuers included in the Carbon Underground 200.

14.3. Additional Information [Optional]

          
        

SG 15. ESG issues for internally managed assets not reported in framework

15.1. Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Hedge funds

We have MSCI ESG and Sustainalytics data loaded into our in-house equity platform and available to view for all users, including the quant (hedge fund) team. Users can bring up any portfolio and see their ESG exposures. For both data providers, we show the overall ESG score/rank as well as the E,S, and G scores. For each we also show the 1M,3M, and 6M changes.

We also have additional ESG data items in our database and we currently have ongoing research projects that are looking at how best to use this data in our quant process.

Cash

We currently do not incorporate ESG issues into our cash management strategies.

Other (1) [as defined in Organisational Overview module]

We currently do not incorporate ESG issues into our derivatives, and external funds.

15.2. Additional information [Optional].


SG 16. ESG issues for externally managed assets not reported in framework

16.1. Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Listed equities - ESG incorporation

External managers are provided with our Proxy Voting Guidelines and are asked to vote in accordance with them on a best efforts basis. The guidelines communicate both how we will vote on environmental and social issues and how environmental and social factors can impact our voting.  Additionally, we receive quarterly reports of their proxy voting, disclosing 100% of the proxy votes made by our sub-advisors on our behalf.  Further, we provide them with our Approach to Responsible Investment and ask them to consider it in their investment approach on our behalf. Our Approach to Responsible Investment details how we integrate ESG issues throughout our investment process and how we will work as active, engaged owners. It addresses the core components of our ESG integration, identifying key issues in each area and providing context surrounding our consideration of these issues in our investment process. Further, it addresses the importance of engaging with issuers on ESG topics and the need for active, informed proxy voting that is aligned with our approach.  We also ensure that our sub-advisors comply with our firm-wide policy which prohibits any investments in companies associated with the production, use or distribution of anti-personnel land mines or cluster munitions.

Listed equities - (proxy) voting

We have provided the RBC GAM Proxy Voting Guidelines to all of our external equity managers, and have asked them to implement our guidelines on a best efforts basis.  Most external equity managers have fully or partially implemented our guidelines.  All external equity managers provide quarterly reporting on proxy voting which we incorporate into the RBC GAM vote disclosure.

16.2. Additional information.


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