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RBC Global Asset Management

PRI reporting framework 2017

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(A) Implementation: Screening

LEI 06. Types of screening applied

06.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

Our designated socially responsible strategies have negative screens for alcohol, gaming, military weapons, pornographic materials, nuclear power and tobacco products. Most of the exclusionary screening criteria are based on a threshold of involvement that is defined in terms of percentage of annual revenues. Any company that meets any of the exclusionary screening criteria will be placed on a prohibited securities list and will not be eligible for inclusion in our designated socially responsible strategies. For our fossil fuel free strategy, we exclude all companies that extract, process, and transport fossil fuels.

When we control the investment policy for a portfolio, we will not knowingly invest in companies whose business activities would contravene the prohibitions contained in the Anti-Personnel Landmines Convention or the Convention on Cluster Munitions.

Where there are full economic sanctions that prohibit any financial dealings with a foreign state, including investment in entities operating under the authority of the foreign state, we will not invest in securities that fall within the sanctions. Where sanctions have been imposed against foreign countries that do not prohibit financial dealings we will identify and assess any risk and consider whether the investment would still be in the best interests of our clients.

Screened by

Description

Qualitative screening criteria are applied to our designated socially responsible strategies where it is possible for a company to perform both positively and negatively. The application of qualitative criteria involves evaluating each company's overall performance, both positive and negative, in each issue area and balancing strengths and concerns. Our qualitative screening criteria include: community, corporate governance, employee relations, environment, human rights and product/business practices. In the specific areas of occupational health and safety and environmental performance, we apply the qualitative screening criteria using a best-of-sector approach, where each company's record is evaluated relative to that of its industry counterparts. The standards for performance are best industry practices.

Screened by

          Anti-Personnel Landmines Convention and Convention on Cluster Munitions
        

Description

As described above, when we control the investment policy for a portfolio, we will not knowingly invest in companies whose business activities would contravene the prohibitions contained in the Anti-Personnel Landmines Convention or the Convention on Cluster Munitions.

These exclusions apply to direct equity and corporate credit holdings, but do not apply to derivatives or other index exposures where our exposure is indirect and outside of our control and which would not meaningfully impact the ability of these companies to obtain capital.

06.2. Describe how the screening criteria are established, how often the criteria are reviewed and how you notify clients and/or beneficiaries when changes are made.

The principles for our screened strategies were developed in consultation with our ESG service providers. The criteria have been reviewed and no substantial changes have been made since inception. If substantial changes are made, we would provide detailed disclosure to our investors describing those changes in advance of those changes being made.


LEI 07. Processes to ensure screening is based on robust analysis

07.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

07.2. Additional information. [Optional]

External research and data used to identify companies to be excluded/included is subject to an internal review by RBC GAM staff.


LEI 08. Processes to ensure fund criteria are not breached

08.1. Indicate which processes your organisation uses to ensure fund criteria are not breached

          Our screened strategy holdings are periodically sent to one of our ESG research providers for review.
        

08.2. If breaches of fund screening criteria are identified - describe the process followed to correct those breaches.

Should there be a breach of fund screening criteria, ineligible securities would be sold immediately and our error review process would be activated, which includes an assessment of the root cause of the error and taking appropriate steps to prevent similar errors in the future.  The client would also be compensated for any loss incurred as a result of the error.

08.3. Additional information.[Optional]


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