What is Sustainable Investing?
At Addenda Capital, sustainable investing involves a four-pronged approach that includes Promoting sustainable financial markets, ESG integration, Stewardship and Impact investing. Consult our Sustainable Investing Policy. In certain circles, sustainable investing may be referred to as ethical investing or socially responsible investing (SRI). Some investment firms may define their brand of sustainable investing in a very narrow fashion (e.g. only negative screening practices), while others may have a broader perspective and encompass practices such as divestment and community investing.
What is ESG?
ESG is an acronym for environmental, social and governance. ESG issues can affect long term investment performance. At Addenda Capital, we systematically pay attention to ESG issues to help our clients meet their investment objectives. Not all ESG issues will have a material impact on investment returns during an investment horizon, but we endeavor to identify those that could, and take them into consideration in our investment decisions. Read more...
What is Carbon Footprint?
A carbon footprint is a measure of the greenhouse gas emissions of individual investments or of investment portfolios. The carbon footprint of an individual investment, such as a company, is its greenhouse gas emissions over a given period of time where tonnes of carbon dioxide equivalent per year (t CO2-eq/y) is the unit of measurement. In addition, carbon footprints are often normalized in order to allow comparison between companies using tonnes of carbon dioxide equivalent per million dollars of revenue per year as the unit of measurement (t CO2-eq/$M revenue).
What is Montréal Carbon Pledge?
Many institutional investors believe that there are long-term investment risks and opportunities associated with greenhouse gas emissions, climate change and carbon regulation. In order to better understand, quantify and manage these risks and opportunities, signatories pledge to measure the carbon footprint of the investments they make. They are committed to disclose annually the carbon footprint of their investments, with the aim of using this information to develop an engagement strategy and set carbon footprint reduction targets. After signing the Pledge in 2015, Addenda Capital became the first investment firm in Canada to disclose the carbon footprint of all its equity funds.
What is Screening?
Screening excludes or includes certain securities from investment consideration based on social and environmental criteria. For example, many socially responsible investors will, on moral or ethical grounds, screen out so-called "sin stocks", including purveyors of tobacco, alcohol, adult entertainment, nuclear power, gambling and weapons.
What is Impact Investing?
Addenda Capital defines impact investing as a client-driven investment approach that seeks to create both competitive financial returns and positive social and/or environmental impact that can be adequately measured, tracked and reported. Examples include investments in renewable energy, postsecondary education and clean technology. Read more...
What is Stewardship?
Sustainable stewardship activities help protect and enhance the long-term interests of shareholders and other stakeholders. At Addenda Capital, they take the form of proxy voting and corporate engagement. Consult our stewardship policy. Read more...
What is Proxy Voting?
The word “proxy” is derived from the word procuration, meaning the authority to represent someone else, especially in voting. The right to vote at annual and special meetings is one of a shareholder’s most important rights. Addenda Capital usually votes “by proxy”, meaning we instruct a third party to vote our clients’ shares in accordance with our instructions, based on our Proxy Voting Policy. By voting at shareholder meetings, Addenda Capital aims to affect governance, communicate preferences and signal confidence or lack of confidence in a company’s management and oversight.
What is Corporate Engagement?
This stewardship activity, also known as shareholder activism, involves purposeful dialogue with investee entities on important matters identified through monitoring, and on matters that are the subject of votes at shareholder meetings. For example, if Addenda Capital has concerns about a company’s strategy, performance, governance, compensation or approach to risks, including those that may arise from social and environmental matters, we will actively engage with that company in order to protect and enhance the shareholder value for our clients. If the company is unresponsive, we may file a shareholder proposal or sell the securities issued by that company.