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RBC Global Asset Management

PRI reporting framework 2019

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Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

The RBC GAM Approach to Responsible Investment is reviewed and updated annually, if required. In addition, RBC GAM publishes its annual and semi-annual Corporate Governance & Responsible Investment reports as at December 31 and June 30.

SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          Provide ESG training opportunities to all investment teams and portfolio managers.

Progress achieved

Key performance indicator (KPI) was achieved. All investment teams and portfolio managers were offered training opportunities during the calendar year. Opportunities largely came through our service providers, including dedicated training sessions using the research and platform of our newest ESG research provider, TruValue Labs, and team-specific training sessions with industry experts.

In addition, our CGRI team trained investment team members on requests regarding ESG research and the capabilities of our research providers' platforms.

Key performance indicator

          Provide investment teams with resources to assist their engagements on ESG topics.

Progress achieved

KPI was achieved. In an effort to provide our investment teams with topical ESG research and guides, an internal webpage was created by our CGRI team to share ESG-related content. Included on the webpage are resources dedicated specifically to engaging on ESG issues. In addition, investment teams had the opportunity to be trained on leveraging the research of our ESG research providers to identify potential targets for ESG-related engagements.

Key performance indicator

          Grow commitment to transparency and reporting on ESG issues and activities, both internally and externally.

Progress achieved

KPI was achieved. The CGRI team has a goal of increasing its number of internal and external reports. Having increased its reporting year-over-year, the CGRI team has presented its reports to the various investment teams, including carbon footprint reports for a number of different funds. In addition, the team responded to ad-hoc requests for information and reporting.

As noted above, the CGRI team developed an internal webpage in 2018 where topical research, thought pieces, white papers and guides can be shared with our investment teams. Content on the webpage is added on an ongoing basis, often through additions from our investment teams.

Additionally, in order to strengthen communication between the CGRI team and RBC GAM's investment teams on proxy voting, and to facilitate greater investment team participation in the proxy voting process, the CGRI team continued the distribution of weekly proxy voting notifications which detail upcoming vote recommendations for issuers in individual managers' portfolios.

Overall, internal awareness of ESG issues has been increasing significantly as a result of these activities, particularly in regard to proxy voting.

Key performance indicator

          Develop a focused and structured engagement program to deliver value for our investment teams.

Progress achieved

Progress continues to be made in achieving this KPI. RBC GAM's engagement activities expanded once again in 2018, including both proactive engagement and reactive engagements initiated by companies held in our portfolios.

In 2018, we finalized a framework to identify engagement targets based on climate-related risks and opportunities, specifically as it relates to climate-related disclosure. We expect this growth to continue in 2019 as we carry out our engagement activities.

Key performance indicator

          Continue developing custom processes and ESG integration methods aligned with existing investment processes.

Progress achieved

KPI achieved. Our investment teams continued to develop specific ESG integration methods that work best with their existing investment processes. Rather than taking a top-down approach to ESG integration, RBC GAM believes that each of its investment teams should develop their own respective ESG integration processes organically, so those processes can add value to their existing approaches. Accordingly, a key component of the CGRI team's mandate is to assist the investment teams in their integration of ESG and we were encouraged by the increasingly streamlined and sophisticated approaches our investment teams developed throughout 2018.

One example of the continued development of ESG integration methods comes from our Fixed Income teams, where an “ESG Watch” group was formed. The ESG Watch group serves as a discussion group and research aggregator for all things related to ESG. This group is of particular importance, as it incorporates ESG-related matters from a variety of perspectives (Emerging Markets, Investment Grade, Corporate, SSA, etc.). The group maintains a growing body of ESG-related research and initiates discussions based off that resarch.

Financial performance of investments

ESG characteristics of investments

Other activities

Key performance indicator

          Continue to be an active member in RI organizations and initiatives

Progress achieved

KPI achieved. RBC GAM continued its participation in the following organizations throughout 2018:

- Canadian Coalition for Good Governance
- Responsible Investment Association
- Council of Institutional Investors
- International Corporate Governance Network
- Investor Stewardship Group
- Canadian 30% Club Investor Group

Additionally, we engaged with Canada's Expert Panel on Sustainable Finance (the Panel) alongside like-minded investors. The Panel was asked to develop recommendations on next steps for the Government of Canada to consider as it works to promote the country’s low-carbon, economic transition and, as a result, the focus of our engagement in 2018 was primarily to provide the Panel with input on disclosure practices of Canadian issuers and the implications of potential regulatory changes on capital markets and industry.

06.2. Additional information.

Although not formal objectives for the reporting year, RBC GAM and the CGRI team achieved additional objectives listed under SG 06.1.

Encouraging others to join RI initiatives

We reached out to our external asset managers to encourage them to review the PRI's six principles and consider becoming a signatory.

Documentation of best practice case studies

In an effort to provide our investment teams with topical ESG research and guides, an internal webpage was created by our CGRI team to share ESG-related content. Included on the webpage are case studies and examples of ESG integration.

Using case studies to demonstrate engagement and ESG incorporation to clients

Case studies on the ESG integration activities of our investment teams were published in our semi-annual CGRI reports, reports and presentations delivered directly to clients and prospects, and featured in wider publications such as the collaborative publication between the PRI and CFA Institute, "Guidance and Case Studies for ESG Integration: Equities and Fixed Income".

BlueBay provides detail on its specific responsible investment objectives in its RI Transparency Report.