BCI Responsible Investing Annual Report

2018 BCI Responsible Investing Annual Report

bcIMC Responsible Investing Annual Report

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RESPONSIBLE INVESTING ANNUAL REPORT / 2018 2 To Our Clients Long-term financial sustainability is the driving force behind our approach to responsible investing. Our fundamental purpose is to build financially meaningful futures for our clients for generations to come; everything we do must support this. Environmental, social, and governance (ESG) factors that we face today will affect the returns of tomorrow. To generate sustainable, long-term returns far into the future, our investment activities must focus on strong performance, effective risk mitigation, and active management. Responsible investing goes hand-in-hand with active ownership. With our clients increasingly allocating their funds into illiquid investments, we are becoming more invested in the long-term success of our portfolio companies. As direct owners, their risks, and their opportunities, become ours. It is our responsibility to increase the value of these long-term investments through board representation and shareholder rights, influencing strategy and ensuring that operations align with our expectations. Chief Executive Officer / Chief Investment Officer 1 World Economic Forum. (2019). The Global Risks Report 2019 14th Edition. Retrieved February 26, 2019 from World Economic Forum http://www3.weforum.org/docs/WEF_Global_Risks_Report_2019.pdf Part of our role as a long-term owner is to consider the risks and opportunities that global ESG factors present to our portfolio. According to the World Economic Forum 1 , three of the top five global risks are linked to the physical or transition risks of climate change. The potential effects of climate change are complex and will strongly influence economic drivers, regulatory bodies, and shifting public opinion. BCI's Climate Action Plan helps position our clients' assets to both capitalize on investment opportunities from the long-term transition to a lower carbon economy and protect them from undue physical and transition risks. We believe the most effective way to manage these potential impacts is to integrate climate considerations into every investment decision at the asset, pool, and total client portfolio levels. As our investment portfolio becomes more sophisticated and diverse, our ESG strategy must evolve to keep pace. Over the course of 2019, BCI's asset classes will collaborate on a cross-portfolio approach to ESG. We will be actively engaging with clients, seeking to understand their perspectives on responsible investing.

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