Integration of ESG Factors
Leith Wheeler follows a bottom-up investment process, where security selection is based on fundamental research with a strong “value” bias. When looking to invest in a company, our analysis includes both a quantitative and qualitative assessment of the business and its risks. We take a long-term view and will not invest in a company unless we have a high level of conviction in the business and people running the company.
We believe that poor environmental, social, and/or governance (ESG) practices represent financial risks that can impact the performance of the investments we make on behalf of our clients. We believe the consideration of material ESG factors in our investment process aligns with our fiduciary duty to deliver strong long-term, risk-adjusted returns for clients.
Our core approach across investment strategies is ESG Integration, whereby material ESG factors are assessed alongside traditional financial analysis in our investment process to identify potential risks and opportunities.
When we assess a company’s ESG practices we are looking at elements such as the policies in place and who has oversight, as well as quantitative metrics that help demonstrate the effectiveness of the company’s approach (ex. trends in GHG emissions, injury rates, employee turnover, etc.). We evaluate these factors in the context of best practice and considering the company’s absolute risk exposure.
Stewardship
We regularly engage with companies on ESG topics to encourage improvement in key ESG metrics, advocate for enhanced policies, gain additional clarity on their approach, and seek better public disclosure. These discussions are valuable for our ongoing monitoring and send a signal to the company of the importance we place on these issues.
We recognize that proxy voting is one of the most effective tools shareholders have to ensure good corporate governance. Each proxy vote is thoroughly analyzed on its own merit according to our Proxy Voting Policy. We will vote against management recommendations to support the best interests of shareholders.
Proxy Voting Guidelines
Responsible Investing Memberships
As part of our commitment to responsible investing, we are members/signatories of the following organizations:
- Principles for Responsible Investment (PRI) – signatory since December 2013
- Canadian Coalition of Good Governance (CCGG) – members since 2003
- Climate Engagement Canada (CEC) – founding participant since October 2021
Leith Wheeler was among the first 100 signatories to the PRI's Statement on ESG in credit risk and ratings, an initiative asking credit rating agencies to formally enhance the systematic and transparent consideration of ESG factors in their ratings.
Transparency
As a signatory of the PRI, we are required to report on our responsible investment activities on an annual basis. Our Transparency Report is publicly available on the PRI’s website as well through the link below. We also produce our own Responsible Investing Report which provides further detail on our key ESG initiatives, engagements and proxy voting. The report is available by contacting Principal, Portfolio Manager - ESG, Lisa Meger, here.
Click below for more information:
2024 RI Transparency Report