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Alberta Investment Management Corporation

PRI reporting framework 2020

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Engagement

LEA 02. Reasoning for interaction on ESG issues

Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual / Internal staff engagements
Collaborative engagements
Service provider engagements

02.2. Indicate whether your organisation plays a role in the engagement process that your service provider conducts.

02.3. Indicate the role(s) you play in engagements that your service provider conducts on your behalf.

02.4. Additional information. [Optional]

AIMCo invests funds on behalf of public sector clients within the province of Alberta. Engagement with investee firms is intended to positively impact investee firms’ ESG processes in order to protect and enhance long term, risk-adjusted investment returns for AIMCo clients. ESG focus areas are approved by AIMCo's Responsible Investment Committee. AIMCo also views engagements as a two-way communication process and dialogue with the company, to enable AIMCo to better understand the company's perspective while promoting the shareholder perspective. AIMCo generally prefers to engage with a firm rather than divest, that is to exercise ‘voice over exit,’ so as not to reduce the investable universe, and to contribute to firms’ progress. Engagement is intended to be both proactive and reactive, conducted individually, collaboratively with peers or through the Canadian Coalition for Good Governance (CCGG) as deemed appropriate.


LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagements.

Indicate the criteria used to identify and prioritise engagements for each type of engagement.
Type of engagement
Criteria used to identify/prioritise engagements
Individual / Internal staff engagements

Individual / Internal staff engagements

specify

          ESG Focus Area/Advocacy; Probability of Success/Influence; Costs of Engagement
        
Collaborative engagements

Collaborative engagements

specify

          ESG Focus Area/Advocacy; Probability of Success/Influence; Costs of Engagement;
        
Service-provider engagements

Service-provider engagements

03.3. Additional information. [Optional]

Additional criteria for identifying and prioritizing engagements include the following: ​

  • ESG Focus areas: Climate change, worker safety and human rights across the supply chain, and shareholder rights, including say-on-pay, executive compensation aligned with performance and women on boards.
  • Probability of Success or Influence: Likelihood of success and/or possible influence of co-investors and public opinion
  • Costs of Engagement: Transaction costs and/or the availability of AIMCo resources to initiate and monitor the engagement.

AIMCo is an active member of the Canadian Coalition for Good Governance (CCGG) which conducts engagement meetings with Canadian issuers on behalf of its members. PRI considers CCGG to be a standard-setting non-government stakeholder in the Canadian market. Their engagement activities fall into the 'Active Ownership Services' category as per PRI's reporting definitions. Since 2009, CCGG has been engaging directly with the boards of public companies in Canada on governance matters that are of interest to its members.


LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.
Indicate whether you define specific objectives for your organisation’s engagement activities.
Individual / Internal staff engagements
Collaborative engagements
Service-provider engagements

04.2. Additional information. [Optional]

AIMCo's Responsible Investment Committee (RIC)  is chaired by our CEO and is comprised of our CIO and senior executives from all asset classes, as well as from Legal, Compliance, Risk, Corporate Office, CFO Office and Client & Stakeholder Relations. The RIC approves and reviews AIMCo's ESG focus areas annually which informs the scope of our proactive engagement activities such as topics for our quarterly letter writing campaign.  


LEA 05. Process for identifying and prioritising collaborative engagement

Indicate whether you monitor and/or review engagement outcomes.
Individual / Internal staff engagements
Collaborative engagements
Service-provider engagements
Indicate whether you do any of the following to monitor and/or review the progress of engagement activities.
Individual / Internal staff engagements
          Recording engagement outcomes for internal communication and training purposes
        
Collaborative engagements
          Recording engagement outcomes for internal communication and training purposes
        
Service-provider engagements
          Recording engagement outcomes for internal communication and training purposes
        

05.3. Additional information. [Optional]

AIMCo views engagement as a journey, not a destination. A successful engagement leaves the door open to continued engagement. Companies are added to our proxy voting watchlists and monitored for ESG upgrades/downgrades and incidents.

AIMCo tracks issuer progress against ESG defined objectives for specific ESG engagement campaigns, such as the rate of progress for women on boards, climate-related disclosure aligned with the Task Force on Climate-related Financial Disclosures (TCFD) final recommendations, rates of adoption of say-on-pay on the ballot, and improvements made to executive compensation structure. We monitor numbers of engagements, engagement topics, issuers engaged, engagement minutes and engagement outcomes in an engagement dashboard.


LEA 06. Role in engagement process

06.1. Indicate whether your organisation has an escalation strategy when engagements are unsuccessful.

06.2. Indicate the escalation strategies used at your organisation following unsuccessful engagements.

06.3. Additional information. [Optional]

Outcomes and possible AIMCo responses include:

POSITIVE OUTCOME:

  • Gain corporate commitment to beneficial change (ex. ESG disclosure.)
  • Response: AIMCo may consider withdrawing relevant shareholder proposals and/or formal requests for change if issues under consideration are adequately addressed. AIMCo will continue to monitor the investee firm’s implementation of its commitments.
  • Firm halts the offending activity or relationship which causes them to join the AIMCo exclusions list.
  • Response: Notify external and internal investment managers that the firm in question is now re-admissible to the investment universe.

STATUS QUO OUTCOME:

  • No commitment to the beneficial change as requested by AIMCo.
  • Response: Continue engagement by other means, directly with the company, collaboratively with co-investors, or more public disclosure, such as media statement(s.)

NEGATIVE OUTCOME:

  • Entrenchment or deterioration of the original circumstances leading to the engagement.
  • Response: Continue engagement by other means, directly with the company or indirectly with co-investors, via public disclosure, escalation, divestment, or add to exclusions list if warranted. 

LEA 07. Share insights from engagements with internal/external managers

07.1. Indicate whether insights gained from your organisation`s engagements are shared with investment decision-makers.

Type of engagement

Insights shared

Individual / Internal staff engagements

Collaborative engagements

Service-provider engagements

07.2. Indicate the practices used to ensure that information and insights gained through engagements are shared with investment decision-makers.

07.3. Indicate whether insights gained from your organisation’s engagements are shared with your clients/beneficiaries.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

Service-provider engagements

07.4. Additional information. [Optional]

AIMCo has developed a dashboard to track engagement activities and outcomes along with internal reporting protocols. Meeting minutes from Responsible Investment-led engagements are recorded and shared with relevant portfolio managers when egregious issues are unresolved. Information from AIMCo's engagement dashboard is provided to the Responsible Investment Committee (quarterly), clients (quarterly) and select PMs/staff (monthly or as needed). Insights from engagements are used to inform proxy voting, monitor developing trends for internal and external reporting purposes and identify potential emerging risks/opportunities in portfolio companies.


LEA 08. Tracking number of engagements

08.1. Indicate whether you track the number of your engagement activities.

Type of engagement
Tracking engagements
Individual/Internal staff engagements​

Collaborative engagements

Service-provider engagements

08.2. Additional information. [Optional]

Engagements are recorded in an internal dashboard along with engagement outcomes and the ESG performance of previously engaged companies. Companies are added to AIMCo's proxy voting watchlists and ESG monitoring alert tools to track and monitor progress. Alerts and updates are also recorded on the dashboard to streamline reporting to internal and external stakeholders. Dashboard data is updated on an ongoing basis.


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