We use integration as our primary ESG incorporation strategy since it is a comprehensive method that allows ESG risks and opportunities to be considered in the company specific context. As part of our integration efforts, we engage with companies and provide them with an opportunity to address ESG issues, which we believe will improve the long-term, sustainable performance of our investments.
A combination of screening and integration is applied to our designated socially responsible investing strategies. These strategies have been specifically designed to screen out companies that manufacture products and/or provide services that socially responsible investors may wish to avoid. These strategies also employ a qualitative screen that assesses practices in a number of areas such as environment, employee relations, human rights, etc. In addition to these negative screens, integration is used to assess the remaining companies to ensure the relevant ESG factors are appropriately addressed as mentioned above.
RBC GAM offers a global equity fossil fuel free strategy in the U.S., and the RBC Vision Fossil Fuel Free Global Equity strategy in Canada. Both strategies employ a fossil free screen that eliminates fossil fuel producers from the portfolio, and integrate ESG factors. Additionally, in 2018, RBC GAM launched the RBC Vision Global Horizon Equity strategy in Europe, which eliminates fossil fuel producers from the portfolio, in addition to companies involved in the business areas of adult entertainment, alcohol, armaments, gambling and tobacco.
In 2018, RBC GAM also launched the RBC Vision Canadian Equity Women’s Leadership strategy in Canada, which focuses on companies domiciled in Canada that have demonstrated a commitment to gender diversity as part of their approach to corporate governance.
RBC GAM also offers impact investing strategies, such as the RBC Impact Bond and Access Capital Community Investment strategies, to U.S. investors. These strategies integrate ESG factors and focus on investments making net-positive environmental and social impacts, while simultaneously aiming to deliver competitive returns.
RBC GAM also employs norms-based screening to all of its investments. No RBC GAM investment team will knowingly invest in companies associated with the production, use or distribution of anti-personnel land mines or cluster munitions. These exclusions only apply when we control the investment policy for a portfolio. For mandates where we do not control the investment policy, our clients may request different exclusions or no exclusions. We have engaged an independent third party research provider to provide us with a list of companies that should be excluded on the basis of this policy, which is updated monthly.
As a result, the majority of our AUM in Listed Equity falls under the combined 'Screening + Integration' ESG incorporation strategy based on the Reporting Framework's incorporation strategy definitions.