ESG Questionnaire Response - TD Asset Management Inc. (TDAM)

Report date: November 4, 2020

UNPRI Transparency Report

ESG Policies

1. Please provide your ESG-related policies.

Please refer to the attached, "Sustainable Investing Approach - 2020". 

2. Are sustainable investing and ESG factors integrated into your investment process and portfolio management decisions? If yes, please provide details.

Yes. 

In acting in the best financial interest of the accounts we manage, we take a long-term view of environmental, social and corporate governance (ESG) factors. We believe that relevant ESG factors provide a more robust view of risks and opportunities facing the companies in which we invest. For actively managed accounts, we integrate into our investment decision-making process the ESG factors we consider most relevant for the particular mandate. We believe this integration helps produce risk-adjusted returns that are more sustainable for our clients.

Although we augment our work with information from third parties, we consider conducting our own research a key part of the process. We are committed to being actively engaged investors: our sector analysts regularly meet with company management teams and discuss applicable ESG issues, goals and emerging trends. The findings are included in internal write-ups and research reports. We also maintain a database of sector-specific and thematic ESG research.

While holdings within our passive strategies are guided by the relevant indices that they replicate, we continue to evolve our analyses to comprehensively advance sustainability across all portfolios. Passive strategies benefit from the firm's direct and collaborative engagements on ESG issues, the ESG-relevant research incorporated into our proxy voting, and the dialogue we continue to have with regulatory bodies, stock exchanges and other partners on ESG matters.

We have also recently staffed a dedicated ESG Research and Engagement team that will work alongside and support the various investment teams with ESG research, ESG integration and active ownership efforts. This team will work to ensure that we have consistency in our ESG approach across all asset classes and that we are fully representing the various ownership positions that we may have across strategies.

3.a. Are you a signatory to the UNPRI?

Yes

3.b. If you are signatory to other coalitions, please list them.

TDAM actively advances ESG discussions with various coalitions, including but not limited to: 

  • PRI

  • Canadian Coalition for Good Governance (CCGG)

  • Investor Stewardship Group (ISG)

  • Carbon Disclosure Project (CDP)

  • Climate Action 100+

  • Responsible Investment Association (RIA)

  • Global Real Estate Sustainability Benchmark (GRESB)

In terms of engagement, individual and collaborative, we find this to be a very important part of our ESG integration. TDAM believes that engaging with companies and collaborating with other institutional investors is more effective and constructive than divestment, because we can use our influence to encourage changes in corporate practices. Therefore, we participate in initiatives that make collective action easier, including: PRI Fracking, Carbon Disclosure Project (CDP) Climate Change, CDP Water, CDP Forests, CDP Carbon Action and the CCGG.

Our firm also subscribes to and engages in all Corporate Responsibility initiatives of our parent company, The Toronto-Dominion Bank (TD), which includes initiatives such as UNEP-FI (United Nations Environmental Programme – Finance Initiative).

3.c. Indicate any other international standards, industry guidelines, reporting frameworks, or initiatives that guide your responsible investing practices.

Please refer to our response to question 3 b) above. 

4. Please describe how ESG oversight and integration responsibilities are structured at your firm, including the process for escalation of key ESG issues. How do you obtain ESG information/data (e.g. public information, third party research, reports and statements from the company, direct engagement with the company)?

We have a dedicated ESG Engagement Committee that oversees TDAM's overall ESG strategy, integration and implementation. The TDAM ESG Engagement Committee is led by business leaders from departments including portfolio management, investment research, risk management, legal and external distribution. The committee strives to ensure the sustainable investment policy is well implemented across the TDAM platform, and that our ESG strategy is clearly communicated across the business. Members of the committee also collect feedback through engagement with clients and consultants, combining it with industry trends and academic research to influence the business' research and investment agenda.

We have recently staffed a dedicated ESG Research and Engagement team that will work alongside and support the various investment teams with ESG research, ESG integration and active ownership efforts. This team will work to ensure that we have consistency in our ESG approach across all asset classes and that we are fully representing the various ownership positions that we may have across strategies.

TDAM has partnered with Sustainalytics, a third-party external provider, as its official environmental, social and corporate governance data provider to augment our ESG analysis and research.

We perform internal research and utilize Sustainalytics to report and monitor various ESG metrics.

Although we augment our work with information from third parties, we consider conducting our own research a key part of the process. We are committed to being actively engaged investors: our sector analysts regularly meet with company management teams and discuss applicable ESG issues, goals and emerging trends. The findings are included in internal write-ups and research reports. We also maintain a database of sector-specific and thematic ESG research.

All TDAM research reports must include an ESG commentary/analysis.

5. What channels do you use to communicate ESG-related information to clients and/or the public? Do you produce thought leadership (written reports and publications)? If so, is the information available to the public? Please provide links, if applicable.

Yes. TDAM also reports its' ESG involvement publicly, including publishing our PRI Transparency report, Proxy Practices and Sustainable Investing Policy.  Please refer to the website link below: 

https://www.tdaminstitutional.com/tmi/content/AU_CorpVision?language=en_CA

6. Do you have periodic reviews of your ESG process/approach to assess its effectiveness? What are the results? What would cause you to disregard ESG issues in your investment/analysis decisions?

The Sustainable Investing Approach is reviewed and approved annually by the CIO and the ESG Engagement Committee.

We have a dedicated ESG Engagement Committee that oversees our overall ESG strategy, integration and implementation. The TDAM ESG Engagement Committee is led by business leaders from departments including portfolio management, investment research, risk management, legal and external distribution. The committee strives to ensure the sustainable investment policy is well implemented across the TDAM platform, and that our ESG strategy is clearly communicated across the business. Members of the committee also collect feedback through engagement with clients and consultants, combining it with industry trends and academic research to influence the business' research and investment agenda.

Engagement

18. How many companies do you engage with? What proportion of your engagements focus on environmental and social issues? What are your engagement goals? Are these goals outcome/action- based (e.g. decreases in emissions or increases in number of women on the board) or means-based (reporting on emissions or number of women on the board)?

There were 115 total engagements during 2019, across multiple sectors.

TDAM has a dedicated ESG Engagement Committee. The TDAM ESG Engagement Committee has a particular focus to promote better alignment of CEO pay and shareholder performance, as well as encourage board diversity to include at least 30% and/or three women. These goals are outcome/action based.

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