ESG Integration

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

Investment Manager Selection

  • Complete an ESG due diligence questionnaire with managers
  • Review manager’s responsible investment policies
  • Meet with staff members who are focused on responsible investing in order to assess their skills and competence
  • Discuss current governance and management of the firm’s responsible investing activities
  • Assess any collaborative initiatives or direct engagements with the management teams of companies in the investment portfolio
  • Evaluate the quality of the manager’s investment policy and its reference to ESG
  • Assess how ESG implementation is enforced
  • Review how the manager evaluates ESG materiality
  • Examine 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 investment reporting to clients and/or the public
  • Communicate our expectations for future ESG reporting
  • 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 stock and portfolio 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’s ESG capabilities

Investment Manager Monitoring

  • Complete an ESG due diligence questionnaire with managers annually
  • Include responsible investing as a standard agenda item at annual performance review meetings
  • Highlight examples of good practices by other managers in the area of responsible investing
  • Encourage the manager to join responsible investing initiatives or organizations, and to participate in collaborative projects with other investors
  • Review the manager’s responsible investment 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 factors in specific investment decisions
  • Discuss securities in the manager’s portfolio that appear to have material ESG risks
  • Incorporate a discussion of ESG considerations in our internal manager review memos, including rating the manager’s ESG capabilities