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Research and White Paper

RBC approach to climate change

Introduction

As an asset manager and fiduciary of our clients’ assets, we have
an important responsibility to consider all material factors that
may impact the risk-adjusted returns of our investments. At RBC
Global Asset Management (RBC GAM)1
, we believe that integrating
environmental, social and governance (ESG) factors into our
investment process empowers us to enhance the long-term,
risk-adjusted performance of our portfolios and supports our
fiduciary duty. Climate change is one such factor.

The impacts of climate change are systemic and unprecedented.
They’re also already apparent. While climate change has the
potential to affect the global economy, the economic impacts
on specific markets, regions, and investments are complex,
varied, and uncertain. As asset managers and investors, and
stewards of our clients’ assets, we believe considering climate-related risks and opportunities in our investment approach
can enhance our long-term risk-adjusted results.

Board oversight, management accountability, and
cross-enterprise collaboration are essential for effective
implementation. It is for this reason that RBC GAM’s approach
to climate change has been approved by the RBC GAM
Executive Committee, which reviews and monitors progress
against our objectives on an annual basis. The Corporate
Governance and Responsible Investment (CGRI) group
and our investment teams are primarily responsible for
implementation. Our Chief Investment Officer (CIO)
serves as the ultimate investment risk owner.
RBC GAM currently analyses and assesses climate-related
data, and continues to evaluate new tools and approaches
for integrating this data into our investment processes. For
example, we have:

  • introduced carbon footprinting of our portfolios
  • implemented new proxy voting guidelines that set out
    how we will vote on climate-related shareholder proposals
  • actively engaged with our investee companies to encourage
    disclosure of the impacts of climate change on their
    business model

This is a good start, but there is more work to be done.
We are committed to fully integrating climate change into
our investment process and providing clients with climate-based solutions and reporting that meet their needs. Our
approach to climate change details the actions we are
taking to meet this commitment.

CATEGORIES: Environmental INVESTMENT STYLE Environmental: Climate Investment Style: Responsible