JFL

Sustainable Investing

Our Approach to Sustainable Investing

Sustainable investing involves an analysis beyond short-term profits, favoring instead factors that support long-term value creation. Consistent with our investment philosophy as long-term investors in high-quality businesses, we integrate Environmental, Social and Governance (ESG) factors into fundamental investment analysis. We believe a company’s ESG policies and track record are likely to be a helpful lens through which to gauge quality, furthering our ability to invest in the most sound companies.

Sustainable investing at Jarislowsky Fraser involves the following:

•             Integrating ESG risks and opportunities into investment decisions;

•             Taking a long-term view;

•             Being engaged investors and demanding high-quality business practices.

Our approach is pragmatic and ultimately about identifying and investing in quality businesses, which is core to our mission of delivering growth of capital in a prudent manner.

Download “ESG Investing: Increasingly a Mainstream Investment Practice” to learn more.

 

Our Principles

As the world around us changes and issues that impact it continue to evolve, we use the following principles to guide our investment process:

#1 - Integrate the analysis of material ESG factors in our investment decisions. At Jarislowsky Fraser, ESG information is integrated into our bottom up fundamental analysis. ESG factors that are material to the investment prospects are discussed in industry reviews, as well as covered in individual company reports. Proprietary tools, such as our Business Practice Scorecard and Portfolio ESG Scorecard, ensure this is done systematically.

#2 – Take an engaged ownership approach. Acting as long-term stewards is our fiduciary duty and can be an opportunity to add value for shareholders.  We seek constructive engagement with company management, and in some cases with Boards of Directors, on material business concerns including ESG issues. We believe that Jarislowsky Fraser has historically been viewed as a credible shareholder from whom managements seek counsel.  This is further reinforced in our proxy voting decision-making:

  • Proxy voting is fully integrated into our investment process;

  • Our global investment team meets to consider each proxy;

  • Decisions are made in-house by the investment professionals.

#3 - Encourage disclosure of information that is relevant to the analysis of material ESG factors by companies and stakeholders where commercially reasonable. We value management candor and believe that transparency and accountability contributes to the quality and ethics of a company and can drive excellence.

#4 - Collaborate with other organizations in order to advance sustainable investment practices for the benefit of all stakeholders.  See below for a listing of key associations.

Click here to access our complete Sustainable Investment Policy including our Engagement Policy.

 

Values-Based Mandates

We incorporate ESG considerations into quality assessments across all of our mandates.  For clients with specific values-based restrictions, or other investment policy considerations, Jarislowsky Fraser offers a tailored approach to meet their needs. We manage approximately $3 billion on behalf of clients with a variety of unique values based restrictions. Illustrative mandates include “low carbon” and “religious values”. 

 

Accountability & Transparency

Core to our approach is a belief that accountability and transparency drive outperformance.  Consistent with that philosophy, we would highlight the following:

  • Our new Climate-Related Financial Disclosures report: Introducing Jarislowsky Fraser's first Task Force on Climate-related Financial Disclosures (TCFD) report, to provide a deeper understanding of how we are monitoring and managing climate risk.

  • Our Annual Proxy Voting Summary: Over the 12-month period ending June 30, 2020, our firm voted on more than 2,600 proposals and agenda items in 29 countries. Our independent point of view is reflected in our voting statistics. For example, of the total proxy meetings during the year, we had at least one point of distinction from management recommendations in 53% of the meetings.  For more details on our voting record, as well as our approach to evaluating shareholder proposals, consult our latest Proxy Voting Summary

           You may also access our Proxy Voting Policy and Procedures.

We will work with clients to develop reporting according to their needs, which may include carbon footprint analysis as well as other ESG elements.

 

Sustainable Investment Committee

The firm has a Sustainable Investment Committee to assist with the coordination of sustainable investing activities and the development of ESG tools across the firm.

 

 

Key Associations

 

Principles for Responsible Investment – We are signatory to the PRI, an international network of investors working together to put the six Principles of Responsible Investment into practice. We were a featured speaker at the PRI 10-year Anniversary Series: Innovations for a Sustainable Financial System.

 

Canadian Coalition for Good Governance – In 2002, Stephen Jarislowsky  co-founded the CCGG to promote good governance practices in the companies owned by its members.  Currently, CCGG members together manage more than $3 trillion in assets on behalf of Canadian investors. Jarislowsky Fraser endorses the CCGG’s Stewardship Principles.

 

CDP (Formerly Carbon Disclosure Project) – In 2007, Jarislowsky Fraser became a CDP signatory to show support for increased corporate environmental public disclosure and behavior change. We believe that measuring, managing, and disclosing environmental indicators is essential to a company’s management of these as both material risks and opportunities.

 

International Corporate Governance Network (ICGN) – We are a member of the ICGN, an investor-led organisation that was founded in 1995 with the mission to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies worldwide.

 

Institute for Governance of Public and Private Organizations – In 2005, Jarislowsky Fraser was a founding member of the IGOPP. The IGOPP is committed to improving governance in the private and public sectors.

 

Sustainability Accounting Standards Board - Jarislowsky Fraser is a founding member of SASB's Investor Advisory Group. SASB’s objective is to establish industry-specific accounting standards for material sustainability issues for use by U.S. publicly listed corporations and their investors. 

 

The Farm Animal Investment Risk & Return (FAIRR) Initiative - Jarislowsky Fraser became a member of the FAIRR Initiative in 2020. FAIRR’s mission is to build a global network of investors who are focused and engaged on the risks linked to intensive animal production within the broader food system. 

 

 

 

Canada Contact: Mark Fattedad, CFA
Director & Portfolio Manager, Institutional Management
Tel: 604.676.3612 | mfattedad@jflglobal.com

US Contact: Dario Mazzarello, CFA
Managing Director, Head, Institutional Management – US & International
Tel: 514.842.2727 | dmazzarello@jflglobal.com

 

Insights & Articles 

The ESG Files: Dual Class or Second Class? 
Jarislowsky Fraser has a longstanding commitment to integrating Environmental, Social and Governance (ESG) factors throughout our research process. We firmly believe that good governance is the foundation for strong financial, social and environmental outcomes. In light of this and recent trends, we examine here the significant governance implications of dual class share structures.

The ESG Files: Sustainable Finance Bonds
Sustainable finance bonds (SF bonds) are a mechanism for financing the achievement of social or environmental goals, allowing individuals and institutions to invest in sustainable development and close this financing gap. The market for SF bonds has developed rapidly in Canada, with annual issuance growing from $1.2 billion in 2014 to $12.2 billion in 2019. The innovation of green, sustainability and social bond labels make the fixed income component of a portfolio a natural starting point for impact-oriented investors.

The ESG Files: Redefining the Purpose of a Corporation
In August 2019, 181 members of the Business Roundtable – a Washington, D.C.-based lobby group consisting of CEOs of the world’s most influential corporations – updated its Statement on the Purpose of a Corporation, for the first time acknowledging that business decisions should deliver value not just for shareholders, but for all stakeholders, including customers, employees, suppliers, communities and the environment. 

How the Pandemic May be Accelerating the Shift to Sustainable Investing
The pandemic has exposed weaknesses in a world of just-in-time global supply chains, it has shone a bright light on the realities of global inequality, and it has demonstrated just how fast carbon emissions can fall when people stop travelling. For us, it also highlights the need and opportunities of investing in a more resilient and sustainable future.

Investing in the Time of COVID-19: An Analysis of Company Performance & Stakeholder Support
The COVID-19 pandemic has had a profound impact on people and societies. In the world of investments, we see a silver lining in the opportunity for corporations to distinguish themselves through their support for various stakeholders, going beyond shareholders, to create long-term value. (You will be re-directed to the RIA site where the article was published.)

 

Videos

GLOBAL SOLUTIONS
INVESTMENT PHILOSOPHY: OUR UNIQUE APPROACH

 

Speaking Engagements 

ESG Insights from Varying PerspectivesVirtual Conference | June 15, 2021

Integration of ESG metrics into Executive CompensationWebinar | May 27, 2021

Big Tech: Challenges and Opportunities Through an ESG LensVirtual Event | May 13, 2021

ESG in Financial Analysis Part Two: Master ClassVirtual Conference | June 11, 2020

Assembly of First Nations National Climate GatheringWhitehorse, Yukon | March 3, 2020

Cercle finance du Québec - Colloque Annuel - Investissement responsable, Montreal, Quebec | March 31, 2020

SASB Webinar - The role of corporate Boards in ESG integration, Montreal, Quebec | April 7, 2020

ICD Toronto - Directors' Symposium on Climate Change and Competitiveness in Canada, Toronto, Ontario | June 4, 2020

 

Additional Articles

Ceres Blueprint for Sustainable Investing  This article aims to guide the institutional investor along the path of sustainable investing.