ESG Strategy


bcIMC Responsible Investing Annual Report

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Page 11 of 16

11 ESG STRATEGY Investing in ESG-related strategies is not new to BCI or our clients. These strategies include products such as the Global Quantitative ESG Equity Fund for clients seeking to invest in ESG performance-led investments, the Global Thematic portfolio, as well as green bonds and green real estate. BCI actively seeks opportunities to invest in ESG-themed investments that contribute to improved long-term outcomes for clients and reinforce our investment beliefs. Invest Global Quantitative ESG Equity Fund The Global Quantitative ESG Equity Fund, established in 2019, holds a diversified portfolio of stocks with exposure to desirable ESG characteristics and has the potential to add value over the MSCI World ex Canada Index benchmark. The fund's quantitative stock selection model uses a blend of ESG measures from several different data vendors to identify the attractiveness of securities from an ESG perspective. The signals in the model include traditional sources that provide subjective evaluations of ESG issues, and a new source that uses artificial intelligence to capture sentiment from thousands of textual sources. The signals are combined to produce an aggregate score (expected return) for every stock. We build the portfolio to maximize risk-adjusted expected returns while accounting for transaction costs. Goal of ESG Investments at BCI We actively seek opportunities to invest in all types of markets and products that contribute to improving our clients' long-term wealth across all asset classes. ESG products are a growth area with increasing amounts of capital and funds raised in both public and private markets. BCI does not pursue any new investment if it does not align with our clients' financial goals. However, benefits to the total portfolio can come in many forms. For ESG-related investments, we intend to research and target investments that: Counteract, diversify, or mitigate ESG risk Take advantage of excess returns that are not otherwise accessed through the balance of existing BCI investments The Investment Landscape is Changing The types of ESG products and investment strategies available to investors is rapidly expanding as ESG trends are increasingly influencing the global economy and capital markets. Markets are changing as both environmental and social externalities are increasingly priced and must be considered when targeting long- term resilient investment opportunities.

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