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Alberta Investment Management Corporation

PRI reporting framework 2020

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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
          Governance and policies
        
Conducted by
Asset class
Scope and process

As part of the due diligence process, AIMCo staff review the manager's effort to integrate ESG in investment decision-making and the overall ESG quality of their portfolios. AIMCo monitors which managers are PRI signatories and may, where appropriate, review PRI transparency/assessment reports to gain further insights on the manager's approach to ESG integration.

Outcomes

The manager was found to be fit to continue carrying out its investment activities on behalf of AIMCo.

Topic or issue
          Governance and Limited Partnership Agreements
        
Conducted by
Asset class
Scope and process

Prior to appointing a new manager, AIMCo undertakes an extensive due diligence process including onsite visits to the manager's office to meet investment teams. AIMCo's key governance focus is on ensuring continuity of the present investment team. For this reason, the Key Man Clause is closely scrutinized on the Limited Partnership Agreement.

Outcomes

In majority of instances where AIMCo was not satisfied with the Key Man Clause, the team worked with the manager to alter the clause such that AIMCo was comfortable.

Topic or issue
          Building sustainability
        
Conducted by
Asset class
Scope and process

As per AIMCo's Real Estate Sustainability Guidelines, all of our managers are encouraged to make a conscious effort to improve the sustainability of their assets where feasible. As opportunities arise, AIMCo engages in strategic discussions with managers and conducts necessary analyses to determine the best course of action.

Outcomes

The manager was found to be fit to continue carrying out its investment activities on behalf of AIMCo.

Topic or issue
          Environment, Governance and Risk Mitigation
        
Conducted by
Asset class
Scope and process

The AIMCo Infrastructure team undertook a detailed due diligence review and a site visit to understand the investment strategy and process of a fund, track records of the general partner, industry experience of the key investment personnel, client reporting services offered and the availability of LP advisory board seats. They worked collaboratively to assess the external manager's ESG approaches on the risk mitigation in its target investment market (i.e. the emerging market) and requested for additional documentation on ESG (i.e. PRI reports, GRESB assessments).

Outcomes

The manager was found to be fit to continue carrying out its investment activities on behalf of AIMCo.

09.2. Additional information.

Listed Equity: As part of the investment management agreement, external managers in separately managed public equities are restricted from investing in certain industries, such as the tobacco industry. If they inadvertently were to invest in an excluded company, our Compliance department would flag it and the external manager would be required to sell the holdings in the entity by end of the following quarter. This incident and the underlying reasons for it would then be reported internally in order to avoid future occurrences. The external manager must regularly check with Compliance to ensure that any entity not previously flagged has not entered the exclusions list by fulfilling the criteria for exclusion.  

Governance aspects feature prominently in our considerations for selecting an external manager and generally only managers with a sound management record are considered. For example, AIMCo's Renewable Resources team regularly conducts meetings with selected managers and they receive operational reports covering issues such as workplace safety, environmental protection, human resources, community involvement and consultation to ensure best practice standards are fully implemented and upheld. Similarly, private and public equity external managers are expected to follow established country and industry ESG regulations.


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