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University of Toronto Asset Management Corporation (re University of Toronto Endowment)

PRI reporting framework 2020

You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories (Private)


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          Manager engagement activities
        
Conducted by
Asset class
Scope and process

A number of our fundamental equity managers consider active engagements with corporate management teams a key part of their investment processes. While we take detailed notes of our meetings with managers, we felt we could do more to systematically track and monitor company engagements discussed during the meetings. 

Outcomes

In 2019, we worked with our document management system provider to create a new field in our meeting note template to specifically track the engagement activities of our fundamental equity managers. This will allow us to better monitor the success of these engagements and how they fit into the manager’s overall investment process. In addition, it may help us to put like-minded managers in touch with one another on similar engagements.

Topic or issue
          Comprehensive incorporation of ESG and becoming a signatory to the PRI
        
Conducted by
Asset class
Scope and process

We regularly talk to our managers about the importance of ESG integration and the benefits of becoming a signatory to the PRI. One of our fixed-income managers was taking some elements of ESG into account, but in part because of our encouragement, they adopted a more comprehensive and systematic approach to ESG integration, and they became a signatory to the PRI.

Outcomes

The manager improved their incorporation of ESG factors into their investment decision-making processes and joined the PRI in 2019.  

Topic or issue
          ESG incorporation and reporting
        
Conducted by
Asset class
Scope and process

In regular discussions with investment managers, we encourage them to incorporate ESG considerations into their investment processes, to establish and maintain ESG policies, and to include ESG matters in their regular reporting.

Outcomes

As part of our due diligence and upon request, and in reliance on our standing as PRI signatory (along with that of other like-minded investors), a private equity manager agreed that it intends to maintain policies regarding the implementation of environmental, social and governance principles applicable to portfolio companies with respect to which its fund exercises control.

Topic or issue
          Inclusion of ESG reporting expectations into investment appointment agreements.
        
Conducted by
Asset class
Scope and process

In the process of appointing investment managers, we seek to include provisions in investment management agreements and side letters that reflect our ESG reporting expectations.  These expectations include, but are not necessarily limited to, reporting of material ESG incidents impacting portfolio holdings. 

Outcomes

Generally, we are able to either reach agreement on inclusions of ESG reporting expectations in appointment agreements or reach an understanding that, although not included in appointment agreements, will otherwise be provided.

09.2. Additional information.


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