ESG Integration

As UTAM’s approach to responsible investing has evolved, we’ve become more systematic in weighing ESG considerations when we select and monitor our investment managers. Below, we offer a more granular view of the many ESG-related factors that we typically take into account, where appropriate to the mandate:

Investment Manager Selection

  • Evaluate the manager’s responsible investing approach
  • Review the manager’s responsible investing policies
  • Evaluate the quality of the manager’s investment policy and its reference to ESG
  • Review the manager’s firm-level versus product-level approach to responsible investing
  • Review the manager’s responsible investing promotion efforts and engagement within the industry
  • Meet with staff members who are focused on responsible investing in order to assess their skills and competence
  • Discuss the current governance and management of the firm’s responsible investing activities including how ESG implementation is enforced
  • Discuss the manager’s involvement in collaborative and direct ESG-related engagements with companies in the manager’s investment portfolio
  • Discuss relevant ESG due diligence questions with the manager and follow up where appropriate
  • Review how the manager evaluates ESG materiality
  • Discuss the process for defining and communicating ESG incidents
  • Review the manager’s proxy voting policy and processes (in cases where UTAM would not direct voting)
  • Determine whether the manager is a signatory to the PRI and/or other relevant initiatives and organizations
  • Review responsible investing reporting to clients and/or the public
  • Communicate the type of ESG reporting we expect
  • Evaluate the coverage and quality of the firm’s ESG-related research
  • Assess current strategies for incorporating ESG factors, as well as the manager’s ability to identify and manage ESG-related issues
  • Review ESG-related characteristics of the investment portfolio
  • Investigate the impact of ESG factors on specific investment decisions and, where relevant, subsequent performance
  • Discuss securities in the manager’s portfolio that appear to have material ESG risks
  • Incorporate a review of ESG considerations in our internal manager recommendation memos, including rating the manager from an ESG perspective

Investment Manager Monitoring

  • Discuss how the manager has evolved its responsible investing approach
  • Include responsible investing as a standard agenda item at manager update meetings
  • Where relevant, highlight examples of good practices by other managers in the area of responsible investing
  • Encourage the manager to participate in responsible investing initiatives or to join organizations engaged in promoting ESG integration and responsible investing
  • Discuss and monitor the manager’s participation in collaborative projects with other investors
  • Review the manager’s responsible investing reporting
  • Meet with staff members who are focused on responsible investing to discuss current research and review any changes in the manager’s approach since the last meeting
  • Review ESG-related characteristics of the investment portfolio
  • Request details of the integration of ESG considerations in specific investment decisions
  • Discuss securities in the manager’s portfolio that appear to have material ESG risks
  • Incorporate a review of ESG considerations in our internal manager review memos, including updating the manager’s ESG score