Our approach

Responsible investment (RI) is an umbrella term used to describe a broad range of approaches for incorporating ESG considerations into the investment process. These approaches are not mutually exclusive; multiple approaches can be applied simultaneously within the investment process. For instance, a solution applying exclusionary criteria to the investment universe can also apply ESG integration to remaining assets eligible for investment.

ESG integration and active stewardship

At RBC GAM, ESG integration means that investment teams consider material ESG factors1 when making investment-related decisions within the portfolios that they manage, for applicable types of investments.2

Active stewardship means we convey our views through thoughtful proxy voting, engagement with issuers and regulatory bodies, and collaboration with other like-minded investors.3

ESG integration and active stewardship may include the following activities:

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ESG integration:
Our investment teams have access to ESG-related data, tools and research, which may serve as an input into their investment decisions for applicable types of investments
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Direct engagement:
Engagement involves communication between investors and the boards, management teams, or other applicable representatives of the issuer. We engage with issuers to better understand their approach to material ESG issues or encourage them to adopt better practices (2)
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Proxy voting:
Proxy voting is a key part of our engagement process as it provides an important way for us to convey our views to boards and management. We make our voting decisions independently, in accordance with our custom Proxy Voting Guidelines (4)
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Collaboration:
When appropriate, we work together with like-minded investors, either directly or through organisations and coalitions, to allow us to have greater influence over the ESG practices of the issuers in which we are invested
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Engaging with regulators and lawmakers:
RBC GAM seeks to engage constructively with regulators and other lawmakers. We participate in initiatives that we believe contribute to increased transparency, that protect investors, and that foster fair and efficient capital markets

Our approach to climate change

Our Approach to Climate Change aligns with the three pillars established in Our Approach to Responsible Investment. RBC GAM recognises the importance of the global goal of achieving net-zero emissions by 2050 or sooner, in order to mitigate climate-related risks. We also recognise the need to achieve a just and orderly transition to net-zero that promotes widely shared economic prosperity.

Responsibility to consider all material factors

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 GAM, we believe that integrating environmental, social, and governance (ESG) factors into our investment approach, where applicable, empowers us to enhance the long-term, risk-adjusted performance of our portfolios and supports our fiduciary duty. Climate change is one such factor.

Impacts of climate change

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.

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1. Material ESG factors refer to ESG factors that in our judgment are most likely to have an impact on the financial performance of an issuer/security and may depend on different factors such as the sector and industry of the issuer.
2. Certain fund products do not integrate ESG factors, including but not limited to money market funds, index funds and certain third-party sub-advised funds. Please read a fund's prospectus or offering memorandum for further details.
3. In certain instances involving quantitative investment, passive and certain third-party sub-advised strategies, there is no direct engagement with issuers by RBC GAM.
4. The RBC GAM Proxy Voting Guidelines are applied in Canada, the United States, the United Kingdom, Ireland, Australia and New Zealand. In all other markets, RBC GAM uses the local proxy voting guidelines of our research provider.