ESG Strategy


bcIMC Responsible Investing Annual Report

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Page 6 of 16

ESG STRATEGY 6 The purpose of integration is to incorporate material ESG data and information throughout the investment process at all levels of decision-making. It ensures that all relevant financial and ESG matters are understood and factored into each new investment decision. Integrating ESG into the Investment Process Asset Allocation Our clients determine their personalized long-term strategic asset allocation based on their unique characteristics, circumstances, and risk tolerances. We evaluate model portfolios under various scenarios and assumptions to help our clients determine the best portfolio mix. These scenarios can include ESG risks. For example, we include climate change scenario analysis as one of the lenses used to test the model portfolios. The evaluation shows areas that are more exposed to climate change risks, allowing clients to factor the information into their decision on asset mix. We integrate ESG analysis and risk management in all investment processes, from supporting clients' asset allocation decisions to individual investment decisions within our portfolios. Integrate Asset Class Each time we consider new investment strategies or products, we evaluate ESG risk characteristics to fully understand how it will impact net exposure to ESG risk or opportunities. Materiality The traditional concept of materiality in companies' financial statements is expanding to consider the risks and opportunities created by ESG. We prioritize efforts on those ESG factors that are most material. For example, ESG factors that present the most significant potential impact on financial performance as well as the reputation of an investment, BCI, or our clients.

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