Responsible Investments Are Made Here
Here at the JGH Foundation, we are proud to do our part to invest funds in a responsible manner in accordance with sound investment principles, to enhance economic returns and reduce investment risk.
Responsible Investing aims to incorporate Environmental, Social and Governance (ESG) factors into investment decisions, to better manage these risks and to help generate sustainable, long-term returns.
As stewards of capital, the JGH Foundation believes that it is responsible and prudent behaviour to consider ESG factors in assessing the risks associated with the management of endowed funds entrusted to us. In this context, the JGH Foundation expects its managers to integrate ESG factors into their investment management processes.
ESG FACTORS AND THE JGH FOUNDATION’S INVESTMENT PORTFOLIO
Environmental, Social and Governance factors include:
AN OUTSOURCED CHIEF INVESTMENT OFFICER (OCIO)
Under the oversight of the Investment Committee of the JGH Foundation’s Board of Directors, the Foundation engages external asset managers to manage the investment of its endowed funds.
Through its outsourced Chief Investment Officer model (OCIO), it has mandated the OCIO to rate the managers on their responsible investing or ESG practices; to actively monitor the managers’ practices; and to engage with them where applicable. This is done through monitoring the following key performance indicators (KPIs) as provided by the OCIO:
- ESG Integration (measured by Fund ESG ratings): the goal is for funds to have average ESG ratings close to their respective universes
- Climate change (measured by weighted average carbon intensity at the holdings level): the goal is to be lower than the benchmark
- Diversity (measured by female board representation at the holdings level): all else being equal, the goal is to be higher than the benchmark
- Proxy voting (measured by voting practices): the goal is to ensure managers are voting to express their views to portfolio companies
- Engagement (measured by managers’ responses): the goal is to monitor how managers are behaving with regard to diversity, climate change, management of human rights risks and how they engage with investee companies.
The OCIO also:
- Incorporates third-party ESG data to evaluate individual manager and fund-level profiles
- Monitors the holdings of the managers for certain indicators, such as UN Global Compact flags
- Discusses sustainable investment progress with managers at least on an annual basis, as appropriate
- Sends all managers an annual sustainable investment survey and engages based on responses
- Produces an annual fund report for clients
A COMMITMENT TO RESPONSIBLE INVESTING
The JGH Foundation, in the exercise of its fiduciary duty, will continue to educate itself on Responsible Investing, engage with the OCIO on a regular basis, and review the KPIs of its investment portfolio. Some future priorities include:
- Increasing engagement with the OCIO on the ESG practices of the managers as well as on the exposures to certain sectors that could be considered controversial from a Responsible Investing perspective
- Deciding on whether to exclude certain sectors from the Investment Policy
- Engaging with peers on Responsible Investing practices
- Reviewing and updating, if appropriate, this Responsible Investing Statement on an annual basis
For further information on this statement and the responsible investing practices of the JGH Foundation, please contact Bram Freedman, President and CEO, at bram.freedman@jgh.mcgill.ca
