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A commitment to sustainability

What sets us apart?

Our approach to sustainability combines a macro perspective on ESG risks, opportunities, and imperatives with the depth of local market expertise. As both an asset manager and owner/operator, we have a unique perspective on navigating sustainability's systemic challenges and opportunities. These facets of our identity help us develop and synthesize innovative global frameworks for sustainability analysis and asset management that work in the local context. Unless otherwise noted, any references herein to ESG or sustainability reflect the general approach of Manulife Investment Management to integrating sustainability risk considerations into our investment decision making processes, which may not extend to any of the products offered or distributed by Manulife Investment Management where a third-party is involved in the management of the assets of such product.

1 Manulife Investment Management is a signatory to the Principles for Responsible Investment (PRI) and pays an annual fee. It is compulsory for signatories to report on their responsible investment activities annually.

2 As of September 2020 based on data from 2020 by the Principles for Responsible Investment (PRI) and was based on review of publicly disclosed responses to PRI’s Reporting Framework on Climate Change. Latest available data is shown. For more information on PRI’s Leaders’ Group 2020 award and methodology, please visit https://www.unpri.org/showcasing-leadership/leaders-group-2020/6524.article

Our approach

We believe that ESG risks and opportunities contribute to an investment’s overall risk and return profile and harnessing the opportunities and managing those risks can benefit investors. As stewards of client capital, we have a responsibility to allocate to the companies and issuers that we believe are most resilient to ESG risks and/or best positioned to take advantage of ESG opportunities.

We believe that active management and sustainable investing go hand in hand. We actively engage with the companies in which we invest to assess their business models against sustainability risks and opportunities, with a focus on enhancing and improving their operating strength through the adoption of sustainability best practices.

  • ESG integration 

    • Incorporate material ESG considerations throughout the stages of our investment and lending lifecycles3
    • Strengthen the potential risk/reward profile of our clients’ portfolios
    • Exercise rights to encourage best practices in sustainability factor reporting and management (e.g., proxy voting)

  • Stewardship

    • Engage with companies to mitigate ESG-related challenges and enhance ESG-related opportunities
    • Protect and enhance the value of assets we own or operate

  • Collaboration

    • Collaborate with organizations across the world to amplify our impact on global, systemic issues
    • Expand the scope of our sustainability-focused activity while helping to build more resilient portfolios

3 Integration is based on Manulife IM’s Proprietary Integration Progression Levels (IPL), which measures investment teams progress in ESG integration. We look to incorporate material ESG considerations throughout the stages of our investment and asset ownership lifecycles, taking into account the characteristics of the asset class and investment process in question, as well as industry and geography, among other factors. Each investment team operates in different markets and with different nuances to its approach to investing. Accordingly, each team integrates ESG factors into its investment process in a manner that best aligns with its investment approach.

 

Thematic investment

Our approach to sustainability extends to investments that target specific sustainability themes and objectives such as climate change.

Learn more about Manulife Climate Action Fund

Third party partners 

We carry out extensive research and due diligence on the sustainability practices of third party managers to be able to offer you a range of investing solutions from leading investment managers

Stewardship

Engaging with the companies in which we invest

To us, strong stewardship is inseparable from good investing.

—Paul R. Lorentz, President and CEO, Global Wealth and Asset Management

The UK Stewardship Code reflects global principles of good stewardship

Purpose, strategy, and culture

Disclose your purpose and how your strategy benefits clients | Develop a culture that supports purpose and strategy while also supporting best practices in stewardship

Governance, resources, and incentives

Staff resources and expertise to carry out stewardship function | Evaluate staff on stewardship execution | Create an oversight and policy structure to support and guide activities

Conflicts of interest

Train staff on conflicts of interest in stewardship | Maintain policies and processes designed to mitigate conflicts of interest when they may arise

Promoting well-functioning markets

Engage policymakers and standard setters to encourage sustainable and resilient markets | Identify and address emerging systemic risks

Review and assurance

Regularly monitor and analyze stewardship effectiveness and make changes accordingly | Invite independent oversight of stewardship processes, controls, and recordkeeping

Client and beneficiary needs

Develop mechanisms to capture client feedback and amend policies and procedures in response | Regularly report to clients on activities and outcomes achieved

Stewardship, investment, and ESG integration

Consider environmental, social, and corporate governance risks and opportunities through the investment process across portfolios | Tailor integration of sustainability factors and approach to stewardship by asset class

Monitoring managers and service providers

Work with vendors to ensure data and services meet client needs and constantly improve | Monitor services and data to ensure accurate and consistent high quality

Engagement

Set clear expectations for engagements | Tailor approach to engagement by asset class | Work with stakeholders to achieve outcomes

Collaboration

Partner with peers to encourage specific change | Support initiatives to address systemic risks

Escalation

Develop processes to alter tactics when stewardship isn’t effective in achieving outcomes | Consider collaboration, public statements, and other means of influencing change

Exercising rights and responsibilities

Strategically use rights associated with asset classes to influence best practices | Protect and enhance rights where possible to maximize influence

What is sustainable investing?

Sustainable Investing refers to the incorporation of environmental, social and governance (ESG) factors into the selection and management of investments. By systematically integrating these factors across every stage of the investment process, sustainable investing seeks to improve a portfolio’s risk-adjusted return potential.

Our impact: sustainable investing case studies

We believe active ownership practices are at the center of good stewardship, helping drive strong risk-adjusted investment return potential over time while we seek to make a positive impact on the environment and society.

Expore our case studies

A wide range of factors that can affect investment returns

  • Environmental

    How a company's operations affect the natural environment, and how the natural environment affects the company.

    • Climate change and carbon emission
    • Air and water pollution
    • Biodiversity
    • Energy efficiency
    • Deforestation
    • Waste management
    • Water scarcity

  • Social

    The relationship between a company and its employees, suppliers, and communities.

    • Customer satisfaction
    • Data protection and privacy
    • Gender and diversity
    • Community relations
    • Employee engagement
    • Human rights
    • Labour standards

  • Governance

    The structures or systems a company has put in place to ensure effective direction and control.

    • Board composition
    • Executive compensation
    • Audit committee structure
    • Bribery and corruption
    • Lobbyings
    • Political contributions
    • Whistle-blower schemes

Sustainable investing: why now? 

The rise of sustainable investing has been well documented and shows no sign of slowing down. As of 2020, over USD $35 trillion¹ was invested globally in sustainable and responsible strategies, while in Canada over 60% of professionally invested money was allocated to these types of strategies. While it began as a specialist approach, sustainable investing is now a powerful and enduring megatrend that’s transforming how people and institutions are investing around the globe.

Sustainable investing by the numbers

  • Up 48%

     

    Assets in Canada managed with at least one RI strategy 2018-20201

     

     

  • 62%

     

    Of professionally managed assets in Canada is in responsible investments1

     

     

  • 75%

    Of surveyed investors in Canada want their financial advisors to inform them of sustainable investing options2

1 Global Sustainable Investment Review 2020 – Global Sustainable Investment Alliance.

2 2020 RIA investor opinion survey.

Related viewpoints

April 29, 2022

What is ESG investing?

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The importance of ESG factors in investing has grown rapidly, leaving many onlookers playing catch-up. In this article, we’ll explain what ESG investing is and what it means for investors.
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November 25, 2021

Climate disruption: keys to the transition to renewable energy

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Margaret Childe,  Former Head of ESG Research and Integration, Canada, Manulife Investment Management

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The energy sector’s transition to clean, renewable sources continues to be a slow and complex journey. In this article, we discuss the major themes we see playing out in the energy system today and in the coming decades.
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April 4, 2022

A just transition

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Peter Mennie, ASIP,  Global Head of ESG Integration and Research and Global Head of Investment Risk and Quantitative Analytics, ESG Team Manulife Investment Management

Only a just transition will achieve meaningful action on climate change.
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