Sustainable investing means understanding how environmental, social and governance (ESG) factors can affect a portfolio’s risk and return. More than ever, climate-related factors are having a potential impact on investment performance. At Manulife Investment Management, we believe quality companies making a demonstrated commitment to the environment have a greater potential to outperform and may represent less risk for investors. We are proud to introduce the new Manulife Climate Action Fund, which will fully integrate climate considerations with strong fundamental equity analysis.
While climate change creates complex risks for all businesses, strong environmental policies are also creating new opportunities for companies to lead. As more countries enlist in the Paris Agreement’s effort to limit global warming, companies are discovering ways to add value and outgrow their counterparts by taking steps towards carbon neutrality.
Manulife Climate Action Fund uses the Paris Agreement and science-based targets as a framework for its stock selection process by investing in companies with clear plans to reduce their carbon footprint. It recognizes that to reach these ambitious goals, countries, companies and individuals will have to change how they think and act about the environment and its impact on the economy.
The Paris Agreement’s “ratchet mechanism” increases the likelihood that governments will strengthen policy by 2025. For illustrative purposes only.
Under the Paris Agreement, almost 200 countries representing half the global economy have committed to reduce greenhouse gas emissions in an effort to limit global warming to under 2-degrees Celsius compared to pre-Industrial levels by the year 2100.
By using the Paris Agreement as a framework to align investment decisions with climate data, investors have a genuine opportunity to influence climate change and lower risk in their portfolios.
Source: Manulife Investment Management, MSCI and SBT. As of February 2021. For illustrative purposes only.
Physical Risks
More frequent and extreme climate events cause billions in damage every year.
Transition Risks
Businesses slow to change will face increasing fines and regulatory scrutiny.
Stranded assets
Carbon-generating assets are becoming obsolete due to actions against climate change.
of research, consisting of +2,000 studies, found that paying attention to ESG issues has a positive impact on returns.1
of Canadian investors surveyed are interested in sustainable investing.2
In 2020, Canadian ESG assets surged to $3.2 trillion, growing 48% in just two years.3
To learn more about how to align your portfolio with the environment through Manulife Climate Action Fund, contact your advisor.
Understanding how climate policies can affect a company’s value is key to understanding its true value potential. The benefits may include:
Improved credibility
Broader and more rigorous scrutiny of carbon footprints will reward companies that have taken steps to lower emissions.
Stronger brand
Brands associated with positive environmental policies are perceived as more valuable
Lower risk exposure
Reduced risk means increased value for shareholders.
Preparedness
Companies that acknowledge a carbon-neutral future are better prepared to meet it.
Improved cash flow
Savings from cleaner energy and smarter waste management can be invested for growth.
Competitive returns
The MSCI KLD 400 Social Index has matched or outperformed the S&P 500 Index for the past 10 years.4
Our process begins with a universe of more than 1,500 equities. Our ESG team conducts a rigorous analysis of each company to assess their climate plan and environmental risks. Our Fundamental Equity Team integrates this information into their fundamental analysis and security selection process.
To learn more about how to align your portfolio with the environment through Manulife Climate Action Fund, contact your advisor.
By 2025 100% of their electricity consumption is expected to be derived from renewable power generation.5
100% reliance on renewable energy across its global operations and lowering its direct and indirect emissions by 43% in 2020.6
Reducing CO2 emissions across its entire value chain in line with a 1.5 °C global warming scenario.7
The companies discussed may not be representative of past or future holdings within the Fund. Learn more through our case studies.
In 2020 Manulife Investment Management received a top rating of A+ from the UN Principles for Responsible Investment (PRI) for ESG strategy and governance, and integration in listed equity and fixed income sovereigns, supranationals, and agency bonds (SSA). We are also one of only 20 investment managers worldwide appointed to the PRI 2020 Leaders Group — and the only Canadian investment manager in the group.⁸
The Manulife Investment Management North American ESG team were repeat winners in 2020 for Best ESG team, Investment Management, North America by CFI.co.9
In 2017, Manulife Investment Management, was a founding member of the Climate Action 100+, a five-year initiative that now includes more than 570 asset managers from around the globe representing US$54 trillion in investor capital. It is the largest investor-led collaborative engagement initiative of its kind ever assembled.
For ESG strategy and governance, and ESG integration in listed equity and fixed income SSA.
Named to the PRI Leader’s Group 2020 for Climate Reporting Excellence.
Winner of Best ESG team, Investment Management, North America, from CFI.co - Capital Finance International, in 2019 and 2020.
Founding member and leads on engagements in Canada with energy companies to lower their greenhouse gas emissions, improve climate oversight and reporting.
The work of our dedicated ESG team is used in conjunction with analysis by our Fundamental equity team, led by Patrick Blais, who undertake fundamental analysis, valuation, portfolio management and research.
This investment process seamlessly integrates environmental considerations with fundamental analysis on every stock in the portfolio.
Manulife Climate Action Fund is just the latest example of Manulife Investment Management’s commitment to sustainable investing. Learn more about our approach and what sets us apart.
Patrick Blais is a senior managing director and senior portfolio manager at Manulife Investment Management and head of the Fundamental Equity Team, responsible for Canadian Core Equity strategies and the Manulife Climate Action Fund. Patrick is a CFA charterholder and a Fellow of the Society of Actuaries.
Steve Bélisle, BBA, MSc,CFA
Senior Portfolio Manager
Investing since 2003
Cavan Yie, MBA, CFA
Portfolio Manager
Investing since 2008
Brian Chan, CFA
Senior Investment Analyst
Investing since 2009
Derek Chan, MBA, CPA, CGA, CFA
Senior Investment Analyst
Investing since 2008
Jakub Sulimierski, CFA
Senior Investment Analyst
Investing since 2011
Célia Coulibaly, B.A., M.Sc.
Investment Associate
Investing since 2016
Get to know the Manulife fundamental equity team and the fundamental difference.
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1 Source: Gunnar Friede et al. “ESG & Financial performance: Aggregated evidence from more than 2000 empirical studies,” Journal of Sustainable Finance & Investment, October 2015, Volume 5, Number 4, pp.210-33; Deutsche Asset & Wealth Management Investment; McKinsey analysis
2 Source: 2020 RIA Investor Opinion Survey: https://www.riacanada.ca/research/2020-ria-investor-opinion-survey
3 Source: RIA Canada 2020 Canadian RI trends report: https://www.riacanada.ca/research/2020-canadian-ri-trends-report/
4 Source: MSCI, S&P, as of June 30, 2020. The MSCI KLD 400 Social Index is a capitalization weighted index of 400 US securities that provides exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts.
5 Source: Microsoft, January 28, 2021. https://blogs.microsoft.com/blog/2021/01/28/one-year-later-the-path-to-carbon-negative-a-progress-report-on-our-climate-moonshot/
6 Source: Mastercard Corporate Sustainability Report 2019. https://www.mastercard.us/content/dam/mccom/global/aboutus/Sustainability/mastercard-sustainability-report-2019.pdf
7 Source: https://www.philips.com/a-w/about/sustainability/climate-action
8 Source: PRI Leaders’ Group 2020: https://www.unpri.org/showcasing-leadership/leaders-group-2020/6524.article
9 Source: CFI.ca: https://cfi.co/awards/north-america/2021/manulife-investment-management-best-esg-team-investment-management-north-america-2020/
10 As of May 2021.
Views and opinions that are subject to change without notice. The historical success, or Manulife Investment Management’s belief in the future success of any of the strategies is not indicative of, and has no bearing on, future results. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Manulife Investment Management does not provide investment, legal or tax advice, and you are encouraged to consult your own lawyer, accountant, or other advisor before making any financial decision.
We consider that the integration of sustainability risks in the decision-making process is an important element in determining long-term performance outcomes and is an effective risk mitigation technique. Our approach to sustainability provides a flexible framework that supports implementation across different asset classes and investment teams. While we believe that sustainable investing will lead to better long-term investment outcomes, there is no guarantee that sustainable investing will ensure better returns in the longer term. In particular, by limiting the range of investable assets through the exclusionary framework, positive screening and thematic investment, we may forego the opportunity to invest in an investment which we otherwise believe likely to outperform over time.
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