Public HTML RI reports - PRI reporting framework 2017

RBC Global Asset Management

PRI reporting framework 2017

Basic Information [OO 01 - 09] Gateway asset class implementation indicators [OO 10 - 12]

Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Implementation not in other modules [SG 12 - 16] Innovation [SG 17]

Direct - Listed Equity Incorporation

Overview [LEI 01 - 02] ESG incorporation in actively managed listed equities [LEI 03 - 12] Implementation processes [LEI 03 - 12] (A) Implementation: Screening [LEI 06 - 08] (B) Implementation: Thematic [LEI 09] (C) Implementation: Integration of ESG issues [LEI 10 - 12] Outputs and outcomes [LEI 14 - 16] Communication [LEI 17]

Direct - Listed Equity Active Ownership

Engagement [LEA 01 - 16] Overview [LEA 01 - 02] Process for engagements run internally [LEA 03 - 04] Process for engagements conducted via collaborations [LEA 05 - 06] General processes for all three groups of engagers [LEA 09 - 10] Outputs and outcomes [LEA 11 - 15] Communication [LEA 16] (Proxy) voting and shareholder resolutions [LEA 17 - 27] Overview [LEA 17] Process [LEA 18 - 22] Outputs and outcomes [LEA 23 - 26] Communication [LEA 27]

Direct - Fixed Income

Overview [FI 01 - 03] ESG incorporation in actively managed fixed income [FI 04 - 16] Implementation processes [FI 04 - 06] (A) Implementation: Screening [FI 07 - 10] (B) Implementation: Thematic [FI 11 - 13] (C) Implementation: Integration [FI 14 - 16] ESG incorporation in passively managed fixed income [FI 17] Fixed income - Engagement [FI 18 - 20] Outputs and outcomes [FI 21 - 22] Communication [FI 23]

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You are in Direct - Listed Equity Active Ownership » Engagement » Process

Process

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

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

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

Yes

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

Geography/market of the companies targeted

Materiality of ESG factors

Systemic risks to global portfolios

Exposure (holdings)

In reaction to ESG impacts which has already taken place

As a response to divestment pressure

As a follow-up from a voting decision

Client request

Other, describe

03.3. Additional information. [Optional]

Our ESG-focused engagements are chosen and prioritized using a risk-based approach, which focuses on the materiality of the ESG risks and opportunities facing each company and the size of our investment in it. In addition, there has been a recent increase in the number of issuers proactively engaging with us, in part due to past voting decisions.

LEA 04. Objectives for engagement activities

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

04.1. Indicate if you define specific objectives for your engagement activities.

Yes

Yes, for all engagement activities

Yes, for the majority of engagement activities

Yes, for a minority of engagement activities

We do not define specific objectives for engagement activities carried out by internal staff.

04.2. Indicate if you monitor the actions that companies take following your engagements.

Yes

Yes, in all cases

Yes, in the majority of cases

Yes, in the minority of cases

We do not monitor the actions that companies take following engagement activities carried out by internal staff.

04.3. Indicate whether your organisation defines milestones and goals for engagement activities carried out by internal staff.

Yes

04.4. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

Define timelines for milestones and goals

Tracking, monitoring progress against defined milestones and goals

Establish a process for when the goals are not met

Revisit and, if necessary revise goals on continuous basis

Other, please specify

04.5. Additional information. [Optional]

We monitor the progress of a company in implementing its plans to address ESG-related issues by continuing to communicate with the company and analyzing data and research related to the company and/or industry. Since each engagement is unique, the measurement of any tangible outcomes will depend on the particular circumstances. Similarly, the established process in the case of unachieved goals or unfulfilled issuer commitments is evaluated on a case-by-case basis.

Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

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

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

Yes

05.2. Describe the criteria used to identify and prioritise collaborative engagements

Potential to learn from other investors

Ability to add value to the collaboration

Geography / market of the companies targeted

Materiality of ESG factors

Systemic risks to global portfolios

Exposure (holdings)

In response to ESG impacts which has already taken place

In response to divestment pressure

Client requests

Other, describe

05.3. Additional information [Optional]

RBC GAM is an active member of the Canadian Coalition for Good Governance (CCGG), a member-based organization that collectively engages with Canadian public companies regarding governance issues on behalf of its members. CCGG reaches out to its members for input on companies where engagement on governance issues would be warranted. Prior to an engagement, CCGG asks members whether there are any specific issues they would like addressed.

RBC GAM's Chief Investment Officer is the current Vice-Chair and immediate-former Chair of CCGG and RBC GAM is a very active participant in these collaborative engagements.

We are also open to participating in other collaborative engagements with like-minded shareholders. For instance, the Global Access to Nutrition Index's (ATNI) reports demonstrate slow movement by food and beverage manufacturers in regards to nutrition-related commitments, practices and performance. Having formally supported the ATNI's initiatives, we committed to join other asset managers and owners in engaging with food and beverage companies on these issues to improve nutrition policies, practices and disclosure across the industry.

A member of the CGRI team also sits on the UN PRI Cyber Security Committee that is building an engagement project focused on cybersecurity risks and opportunities at public companies.

LEA 06. Objectives for engagement activities

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

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

Yes

Yes, for all engagement activities

Yes, for the majority of engagement activities

Yes, for a minority of engagement activities

We do not define specific objectives for engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take following your collaborative engagements.

Yes

Yes, in all cases

Yes, in the majority of cases

Yes, in the minority of cases

We do not monitor the actions that companies take following engagement activities carried out collaboratively

06.3. Indicate whether your organisation defines milestones and goals related to engagement activities carried out via collaborations.

Yes

06.4. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

Define timelines for milestones and goals

Tracking, monitoring progress against defined milestones and goals

Establish a process for when the goals are not met

Revisit and, if necessary revise the goals on a continuous basis

Other, please specify

06.5. Additional information. [Optional]

CCGG always engages with companies over a 2-3 year period in order to monitor progress. Following each engagement, CCGG provides reports to members outlining the company's plan to address each ESG issue raised. In subsequent years, CCGG issues follow-up reports outlining the progress of the company.

In addition, RBC GAM will continue to track and monitor the progress of our collaborative engagements outside of the CCGG with other investors or organisations such as the PRI.

Process for engagements conducted with/on your behalf by service providers

LEA 07. Role in engagement process (Not Applicable)

LEA 08. Monitor / discuss service provider information (Not Applicable)

General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement	Insights shared
Individual/Internal staff engagements	Yes, systematically Yes, occasionally No
Collaborative engagements	Yes, systematically Yes, occasionally No

09.2. Additional information. [Optional]

The CGRI team invites the relevant investment teams to participate in all of our engagement efforts. Our investment teams frequently leverage the CGRI team as a resource for their engagements as ESG moves to the forefront of issuers' engagement priorities. It is common for members of the CGRI team and members of our investment teams to participate jointly in our engagement efforts. If our investment teams do not participate directly, we ensure that the issues raised during our engagement meetings reflect the views and priorities of the investment teams.

We track the engagements done by the CGRI team in full and provide a report to the relevant investment teams. We use our best efforts to capture and track any ESG issues that arise during the regular communications between our investment teams and their investee companies.

LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of engagements your organisation participates in.

Type of engagement	Tracking engagements
Individual / Internal staff engagements	Yes, we track the number of our engagements in full Yes, we partially track the number of our engagements We do not track
Collaborative engagements	Yes, we track the number of our engagements in full Yes, we partially track the number of our engagements We do not track and cannot estimate our engagements

10.2. Additional information. [OPTIONAL]

We track the engagements done by the RBC GAM's CGRI team in full and use our best efforts to capture the ESG issues raised in engagements done by our portfolio managers and analysts.

In 2016, we tested an internal tracking method to better capture ESG engagements done by our portfolio managers and analysts. We continue to consider our options as we seek to determine the most efficient and effective tracking and monitoring methods available.

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