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Vancity Investment Management

PRI reporting framework 2020

You are in Strategy and Governance » ESG issues in asset allocation

ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation carries out scenario analysis and/or modelling, and if it does, provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe We undertake scenario analysis to determine the impact of divesting of fossil fuels across our funds.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

In designing our fixed income fund we decided to eliminate fossil fuel producers, distributors and utilities from the investable universe with a resultant sector weight of zero. We also made a decision to increase certified green bond and social bond investments to increase our exposure to ESG opportunities in  infrastructure.  

This year our Canadian fund went fossil fuel free and eliminated  fossil fuel producers, distributors and utilities from the investable universe with a resultant sector weight of zero. 


SG 13 CC.


SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

We have fully divested of companies whose primary business is the extraction, production and distribution of fossil fuels. This means we will no longer invest in oil and gas producers, pipeline companies, natural gas distribution utilities or LNG operations.  We will also avoid investing in service companies whose primary business is supporting the fossil fuel industry. We also allocate investments to green bonds, renewable energy and clean clean technology companies to capture opportunities. We believe this strategy, which is applied to all funds, results in a more climate resilient portfolio.

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

14.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

We utilize the MSCI carbon foot-printing tool to track and report on fund exposure to climate risk.

14.5. Additional information [Optional]


SG 14 CC.

14.6 CC. Provide further details on the key metric(s) used to assess climate-related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Carbon footprint (scope 1 and 2)
          Investment decisions
        
          Tonnes per $million market cap
        
          Comparison between fund and benchmark.
        
Portfolio carbon footprint
          
        
          
        
          
        
Carbon intensity
          Investment decisions
        
          Tonnes per $million revenue
        
          Identifies companies with high business risk from carbon regulation.
        

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risk management processes used for identifying, assessing and managing climate-related risks.

Please describe

Our overall risk framework is based on optimizing sector and company specific risk exposure. Climate risk analysis utilizing foot print tools helps us identify and manage climate exposure within the broad risk management process for fund portfolios. When companies exceed our risk tolerance we divest and seek out new opportunities with a better risk reward profile.

14.9 CC. Indicate whether your organisation, and/or external investment manager or service providers acting on your behalf, undertake active ownership activities to encourage TCFD adoption.

Please describe

We have engaged with Canadian banks on climate risk over the past decade. We meet regularly with these invested banks and have encouraged each to participate in the TCFD. We have also encouraged resource based companies and others to apply the TCFD recommendations to their risk disclosure. In addition we have participated in collective engagement with industry associations on the TCFD implementation.


SG 15. Allocation of assets to environmental and social themed areas

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

18.16 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

2.0 Percentage of AUM (+/-5%) per asset class invested in the area
5 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

2% of listed equity AUM invested in companies innovating clean technology offerings. 

15.8% of our bond AUM is invested in green, social, and sustainable bonds.  The figures have been broken down between the energy efficiency and renewable energy columns for reference. 

Asset class invested

9.73 Percentage of AUM (+/-5%) per asset class invested in the area
10.8 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

9.73% of listed equity AUM invested in companies involved in producing and distributing renewable wind and solar energy. 

15.8% of our bond AUM is invested in green, social, and sustainable bonds.  The figures have been broken down between the energy efficiency and renewable energy columns for reference. 

Asset class invested

0.24 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

0.24% invested in a company with highly sustainbale forestry products. 

Asset class invested

1.92 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

1.92% invested in companies advancing global heath via virtual health access, equitable access to medicine, and animal health welfare. 

Asset class invested

1.37 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

1.37% invested in companies advancing sustainable water technologies and access. 

15.4. Please attach any supporting information you wish to include. [OPTIONAL]



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