Influencing for good: responsible investing in 2020

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7 June 2021

Insight Partner

2020 was a year none of us could have predicted, as the COVID-19 pandemic changed much about the way we live and work. Yet our commitment to responsible investment at BMO remained as clear as ever. We continued to allocate our capital responsibly and engage companies on environmental, social and governance (ESG) issues, reflecting our corporate purpose of boldly growing the good in business and in life.

Our engagement highlights

During 2020, we engaged 760 companies across 50 countries on a wide range of ESG issues. We recorded 1,541 total engagements, resulting in 343 instances of positive change, which we refer to as milestones.

31% of our engagement linked to environmental issues – accounting for 28% of our milestones
43% of our engagement linked to social issues – accounting for 17% of our milestones
26% of our engagement linked to governance issues – accounting for 55% of our milestones.

SDGs and engagement

The UN Sustainable Development Goals (SDGs) provide an ambitious roadmap towards a more sustainable world by 2030, as well as a clear engagement framework for investment specialists to encourage improvement within investee companies.

In 2020, 79% of our engagement linked to the SDGs. Our top engaged goal was SDG 8 – decent work and economic growth for all – at 19%. This largely related to our engagement on workplace safety, which was paramount in the pandemic environment.

“As positive momentum builds around tackling the challenges our societies face, I am excited for what the future can hold, and proud of the opportunity we have at BMO to make a difference.” Kristi Mitchem, CEO, BMO Global Asset Management

Voting and corporate governance in 2020

Exercising the right to vote is a key part of our stewardship responsibilities, and an opportunity to influence change. In 2020, we voted on 117,820 resolutions – 27,563 of which were against management. We regularly engage companies before and after voting to explain our expectations and invite comment, and to explain our reasons for any votes against management.

Public policy and investor initiatives

We continued to contribute to policy development through engagement with regulators in 2020, as we believe that policy and regulatory change are often the catalysts for improved corporate behaviour. Topics covered ranged from climate change in the EU to investor stewardship in Japan. We also participated in collaborative investor engagements and initiatives, which can be key to improving ESG standards on a larger scale. The issues we collaborated on included modern slavery, and mental health and wellbeing.

Interested in learning more? Download our Responsible Investment 2020 Review to discover details of our 2020 stewardship activities and company case studies, plus our key engagement themes for 2021.

Notes/Sources

©2021 BMO Global Asset Management. BMO Global Asset Management is a registered trading name for various affiliated entities of BMO Global Asset Management (EMEA) that provide investment management services, institutional client services and securities products. Financial promotions are issued for marketing and information purposes; in the United Kingdom by BMO Asset Management Limited, which is authorised and regulated by the Financial Conduct Authority. This entity is a wholly owned subsidiary of Columbia Threadneedle Investments UK International Limited, whose direct parent is Ameriprise Inc., a company incorporated in the United States. It was formerly part of BMO Financial Group and is currently using the “BMO” mark under licence.

This article was featured in Pensions Aspects magazine June 2021 edition.

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Last update: 8 November 2021

Vicki Bakhshi

BMO Global Asset Management

Director, Responsible Investment

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The Intergovernmental Panel on Climate Change gave the world a stark warning in 2018 of the dangers of failing to limit the global temperature rise from climate change to 1.5 degrees. This year has seen some of the physical impacts of climate change emerge even sooner than many scientists had predicted, including deadly flooding in Europe and China, and the North American ‘heat dome’ that triggered widespread wildfires.

15 September 2021

ESG engagement: going above and beyond investor letters

Over the past couple of decades, responsible investing has evolved from a niche area of our industry to much more mainstream. Engaging with companies on environmental, social and governance (ESG) issues is a huge part of what it means to be a responsible investor, because using our influence in this way can help drive real, positive change for people and the planet. We recently discussed ESG engagement with three of the companies we engage with to understand how they’ve witnessed engagement evolve and to get their opinions on what good engagement looks like.