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British Columbia Investment Management Corporation

PRI reporting framework 2019

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Investment policy

SG 01. RI policy and coverage

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

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

We are driven by long-term considerations, and invest in quality assets and stable companies with the potential to appreciate in value and provide reliable cash flows in the years to come.

Our business and investment model refocuses us to be an active, in-house asset manager with sophisticated strategies. This model provides us with greater control over the assets, permitting us to actively manage the assets with the view of increasing its long-term value. We focus on majority or co-controlling equity positions allowing us to adopt an active governance approach and align the investment interests of BCI, the portfolio company, and those of our clients.

Our investment beliefs guide our overall approach and address our fundamental belief regarding ESG.BCI believes that environmental, social, and governance matters make a difference and that:

  • Taking environmental, social, and governance (ESG) matters into account enables investors to better understand, manage and mitigate risks associated with long-term investments.
  • Companies that employ robust ESG practices are better positioned to generate long-term value for investors than similar companies with less-favourable practices.

A full description of our other investment beliefs are posted to our website.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

BCI's approach is based on three core activities: integrating ESG into our investment analysis and decision-making processes; being an active owner (covering proxy voting and engagement with publicly traded companies, as well as serving as a director on the boards of our privately-held companies); and being an active participant in the capital markets (focusing on submissions to regulatory bodies, participating in PRI committees and other organizations that address systemic risks, guidelines for responsible investing, as well as improving the investment environment for all investors). This is disclosed in our document, An Overview of BCI's Approach to Responsible Investing. http://read.uberflip.com/i/605664-responsible-investing-overview

01.6. Additional information [Optional].

          
        
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SG 01 CC. Climate risk

01.6 CC. Indicate the climate-related risks and opportunities that have been identified and factored into the investment strategies and products, within the organisation's investment time horizon.

Rapid changes in policy and regulation to limit greenhouse gas (GHG) emissions is the most prominent risk to our short-term total portfolio’s performance. This could lead to additional costs to investments exposed to carbon-intensive energy and supply chains, and impact the business models of several sectors in the broader economy. Opportunities exist as technologies and industries that benefit from low carbon economy alignment increase in scale and value.

Over the medium term, we expect transition risks and physical risks to materialize. We will explore opportunities that are aligned with our investment approach and meet our requirements as an investor of BCI’s scale. Although physical impacts of climate change are not expected to be widespread over the medium term, certain regions may be affected and asset valuations will reflect the trajectory of climate change. Each climate scenario will pose different implications for companies and sectors. Some will face costs as they adapt and transition to a lower carbon model; while others may seize opportunities to expand and grow their businesses.

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

01.8 CC. Indicate the associated timescales linked to these risks and opportunities.

BCI has identified climate-related risks and opportunities over the short, medium, and long term.

01.9 CC. Indicate whether the organisation publicly supports the TCFD?

01.10 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

BCI has publicly released our climate action plan (CAP) and approach to the TCFD recommendations. The Strategy can be found on our website: http://bcimc-ar.uberflip.com/i/1024019-bcis-climate-action-plan-and-approach-to-the-tcfd-recommendations

1.12 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.

specify

          BCI's Climate Action Plan and Responsible Investing Annual Report. 
Documents are available on our public website at https://www.bci.ca/approach/responsible-investing/
        

SG 02. Publicly available RI policy or guidance documents

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

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

 

 


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Conflicts of interest in the investment process are not likely to occur. Our clients do not decide on individual investments; they establish an investment policy, asset allocation and determine their participation in particular pooled funds though not the underlying investments. Individual members of our client boards do not have any authority to direct BCI in investment decisions. Clients establish investment policies that clearly address the roles and responsibilities of all parties involved with their respective fund/plan.

BCI is responsible for ensuring client funds are managed in accordance with the investment policy. All employees are bound by the Corporate Code of Ethics and Professional Conduct (includes a commitment to responsible investment as one of our principles) and must certify compliance annually. BCI is required by its clients to have a comprehensive and thorough conflict of interest policy that meets or exceeds the standards established for the investment industry by the CFA Institute and is required to disclose any material breach by employees or its agents. BCI also has a Code of Conduct for Directors; and board members do not have any authority, individually or as a board, to direct investments.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

Portfolio companies where we sit on the board and/or have a significant equity interest will notify BCI of potential and/or evolving issues within their operations. The portfolio managers will interact with management to understand and monitor their activities, and where appropriate provide strategic oversight and input. BCI's investment professionals also sit on the board of directors, advisory committees, and other sub-committees to fulfill their asset management role. These reporting structures also enable oversight of incidences and long-term risks.


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