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Vancity Investment Management

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

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.

VCIM’s investment process combines financial analysis with environmental, social and governance (ESG) analysis. All securities must meet our ESG and financial criteria for selection. Once a company is confirmed as meeting our ESG criteria, a security is selected for the portfolio based on its fundamental merits as a “company” or business and its merits as a “stock” in terms of the share price and valuation. All investment decisions are based on ESG analysis, internal valuation models and our own investment thesis.

We use qualitative and quantitative analysis to determine this balance and subsequently, which securities will be considered for in-depth financial analysis. Company performance and policy is evaluated in the following areas: employee relations, environmental compliance, diversity, corporate governance, product sustainability, community relations and human rights. Companies that lag their peers are excluded from further analysis and investment. VCIM uses in-house expertise supplemented by third party research.

When new ESG risks arise the managers assess the fund’s exposure and initiate an analysis of each company’s approach to the risk to determine whether further action is required. Further action may include ongoing monitoring of the company’s risk management approach, engaging in dialogue with management, filing a shareholder resolution or divestment

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]

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

Climate risks form a key element in the ESG strategies employed by VCIM. We recognize that climate change poses specific risks to investmetnts and we are particularly focused on the transition away from fossil fuels and the ensuing reduction in demand. At VCIM, we believe we are at a crucial point in the transition to a low carbon future and it is an appropriate time to fully divest companies whose primary business is the extraction, production and distribution of fossil fuels. We no longer invest in oil and gas producers, pipeline companies, natural gas distribution utilities or LNG operations. We also avoid investing in service companies whose primary business issupporting the fossil fuel industry.

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

Describe why your organisation has not yet assessed the likelihood and impact of climate risks

We are currenlty in process of developing assessment capacity that will allow VCIM to asess future climate change impacts with greater confidence. 

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

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

Describe

Vancity’s risk management framework enables the Board to define and approve an appropriate risk appetite, which outlines how much risk Vancity is willing to take in order to successfully achieve its strategic plan. We knowingly and willingly take on risk because we see the upside, and use effective risk management techniques to provide an appropriate safety net.

To manage risk appropriately, Vancity monitors risk across 12 broad and interrelated risk dimensions. In 2017, we added climate risk to our risk oversight because we have come to realize there are both short and long term impacts to our members and operations that we need to pay attention to, and influence as much as possible. For example, rising sea levels that could lead to the flooding of low-lying areas (where many members live and work) and how climate change could impact the frequency and intensity of earthquakes are things that could have detrimental impacts on our community. As we determine how much of a financial risk climate change poses to our business, we intend to disclose more on how we are managing it as recommended by the Task Force on Climate-related Financial Disclosures.

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


SG 02. Publicly available RI policy or guidance documents

 

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

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

URL/Attachment

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.

The policy specifically addresses conflicts that may arise in the proxy voting process where the interests of the fund owners may conflict with the investment manager.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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