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CI Investments Inc.

PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
100 %
Total actively managed listed equities 100%

01.2. Describe your organisation’s approach to ESG incorporation and the reasons for choosing the particular strategy/strategies.

CI Investments incorporates ESG factors into our investment strategies through ESG integration and exclusionary screening (in the case of anti-personnel landmines and cluster munitions). 

Investment Exclusions:

Each quarter, CI Investments' third-party ESG research and data provider, Sustainalytics, provides a list of companies who participate in activities that are deemed to be essential to the proper manufacturing, functioning and use of anti-personnel landmines and cluster munitions. This list is provided to all in-house portfolio management teams as well as external sub-advisors by CI Investments' Compliance Department. These companies are also hardwired into CI Investments' pre-trade system, Charles River, meaning that any trades of these securities are restricted. CI Investments' external subadvisors are required to hard wire the companies into their pre-trades systems. Any security holdings on this list, if held, are required to be divested immediately.

Anti-personnel landmines and cluster munitions were specifically selected as investment exclusions in recognition of the prohibitions contained within the United Nations Anti-Personnel Landmines Convention and the United Nations Convention on Cluster Munitions.

ESG Integration

CI Investments' in-house portfolio management teams - Signature Global Asset Management, Cambridge Global Asset Management, Harbour Advisors, Sentry Investments, CI First Asset Investment Management and CI Multi-Asset Management - consider ESG factors alongside financial factors in their decision-making processes. We have established set of minimum ESG ranking criteria to guide our portfolio managers in this process; these are based on Sustainalytics' company ESG risk ratings:

  • Company is involved in severe and/or very severe controversies
  • Company is assessed as having a high or severe degree of ESG risk
  • Company is ranked within the bottom 25th percentile in terms of ESG risk

CI Investments views these criteria as indicative of material factors for an investment decision. Controversies can be a strong indicator of a company's performance and preparedness in a given area. The combination of the degree of ESG risk and a company's percentile score provides an indication provides an indication of the ESG performance of a company, both from an absolute and relative perspective.

CI Investments' Responsible Investment Team has also worked collaboratively with each in-house Portfolio Management Team to establish materiality thresholds, based on the weighting of a particular security or issuer within a given fund.

Each quarter, CI Investments' Responsible Investment Analyst provides each in-house portfolio manager with a customized ESG portfolio screen of their managed funds. The screens include the following information:

  • Security holding names
  • Holdings' overall ESG risk rating
  • Holdings' ESG risk percentile score
  • Holding's highest controversy level
  • Security weighting in the fund

Any holdings that do not meet the minimum ESG ranking criteria listed above are flagged for each portfolio manager by the Responsible Investment Analyst. If the holding is deemed to be material, as identified by the pre-determined materiality thresholds of each Portfolio Management Team, a review and documentation process is triggeredwhere the portfolio manager is required to review material companies' ESG performance, risks and opportunities using Sustainalytics' online research platform. Following review, each portfolio manager must document their findings and conclusions and share this with his or her portfolio management team through Bloomberg. There is no sharing across different portfolio management teams. The review and documentation process is monitored by CI's Responsible Investment Team and Compliance Department.

To support the ongoing integration of ESG factors into the investment decision-making process, overall ESG risk ratings, ESG risk percentile scores and highest controversy levels are available for all in-house portfolio management teams through Bloomberg so that they may view ESG data in conjunction with financial metrics. In addition, CI Investments' Responsible Investment Analyst is available to all in-house portfolio managers and analysts for on-demand support and guidance. 

CI Investments elected to incorporate ESG factors by way of integration alongside financial factors due to the belief that this method offers the greatest ability to reduce risk and better asses growth potential and future stock performance. This is aligned with CI Investments' objectives of achieving the best risk-adjusted returns for our funds.

 

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]


LEI 02. Type of ESG information used in investment decision (Private)


LEI 03. Information from engagement and/or voting used in investment decision-making (Private)


(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

As per CI Investments' Responsible Investment Policy, we will not knowingly directly invest in companies associated with the production, use or distribution of anti-personnel landmines or cluster munitions, as determined by a third-party research provider. This restriction applies to actively managed funds where CI Investments directly controls the investment strategy of the fund.

Furthermore, CI Investments' external investment subadvisors are expected to abide by these restrictions.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

The decision to restrict investments in companies associated with the production, use or distribution of anti-personnel landmines or cluster munitions was made by CI Investments in recognition of the prohibitions contained within the United Nations Anti-Personnel Landmines Convention and the United Nations Convention on Cluster Munitions. These exclusions recognize the potentially severe damage that can be caused during and after the use of anti-personnel landmines and/or cluster munitions.

This exclusionary criteria will be reviewed on an annual basis and in alignment with review of CI Investments' Responsible Investment Policy. Furthermore, an updated list of restricted investments is provided to all in-house portfolio management teams and external investment subadvisors every quarter by CI Investments' Compliance Department.

CI Investments does not currently have a formal process for notifying clients and/or beneficiaries when changes to the screening criteria are made. However, clients may obtain information and updates on CI Investments' screening criteria by request.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.5. Additional information. [Optional]

Regarding Indicator LEI 05.1:

CI Investments relies on assessments by Sustainalytics to determine company involvement in activities associated with anti-personnel landmines and cluster munitions. Companies assessed to be involved in these activities are hard stops on CI Investments' pre-trade system, Charles River. However, these assessments are not internally audited. In addition, CI Investments' external investment subadvisors are expected to enter in the same restrictions as hard stops on their pre-trade systems.

CI Investments reviews and evaluates external research providers annually. Review and evaluation is primarily related to quality of research as well as the alignment of the research provider's methodology and services with CI's Investments' responsible investment program.

 


LEI 06. Processes to ensure fund criteria are not breached (Private)


(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on robust analysis.

          CI Investments' Responsible Investment Analyst provides each in-house portfolio managers with customized ESG portfolio screens every quarter.
        

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information. [Optional]

In relation to LEI 09.3

Third-party ESG ratings related to overall company performance are updated on an annual basis, however, ratings related to company involvement in controversial events is updated on a more frequent basis, as these events arise and unfold.

 


LEI 10. Aspects of analysis ESG information is integrated into (Private)


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