What does stewardship mean to us?
Review some highlights of our stewardship work over the past year and discover what it means to our clients, employees, and the communities we serve.
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Our approach to sustainable investing
What sets us apart?
We seek to provide solutions for clients using a wide breadth of capabilities, and our commitment to sustainable investing is rooted in our belief in the financial materiality of ESG factors.
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 some of the products offered or distributed by Manulife Investment Management for which ESG integration is not applicable (or where another approach to ESG integration is adopted), including where a third party is involved in the management of the assets of such product. For complete information of the products, please see the applicable offering documents. Similarly, participation as signatory of various global or local initiatives relates to the approach taken by Manulife Investment Management as an entity, not by any of the products it’s offering.
A demonstrated commitment to sustainability
As supported by our most recent PRI assessment1
Stewardship
Interactions with equity and fixed-income issuers, influencers, regulators, nongovernmental organizations, governments, and vendors in 2023
Global collaboration
To help inform our sustainable investing practices, we engage with sustainability-focused organizations, including:
- Climate Engagement Canada: Engaging Canada’s highest emitting companies to manage climate-related risk, improve governance, reduce emissions, and report on their progress.
- 30% Club Canada Investor Group: Supporting companies as they seek at least 30% women on boards and other forms of diversity in leadership.
- Canadian Sustainability Standards Board (CSSB): We have a seat at the board that is setting sustainability standards for Canadian companies to report on their sustainability risks and opportunities.
- Nature and biodiversity: We're involved in several collaborations that encourage companies to reduce their impact on nature and biodiversity loss, and report on their risk and dependencies on nature, including Finance for Biodiversity, Nature Action 100+, and the Valuing Water Finance Initiative.
Recognition
Retained signatory status to the UK Stewardship Code as of 2023
Retained our Avant Gardist rating2 in the 2023 Responsible Investment Brand Index
Important disclosures
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 Hirschel and Kramer (H&K) Responsible Investment Brand Index (RIBI™) highlights the ability of close to 600 asset managers globally to translate their efforts toward responsible investment into their core brand. The RIBI™ is made up of two ratings: the Commitment rating, which focuses on hard factors (e.g., level and quality of Listed Equity voting), and the Brand rating, which focuses on soft factors (e.g., the existence of a Purpose statement and the quality of its expression). The Avant-Gardist rating is given to firms with above average on theCommitment rating and Brand rating. Manulife Investment Management paid a fee for the rights to use the award logo. Further information here: https://www.ri-brandindex.org/
Our approach
Our approach to sustainable investing rests on three pillars: integration, stewardship, and collaboration. While their expressions may vary by asset class and investment team, each pillar is fundamental to our investment approach and forms the basis on which we pursue our sustainability objectives and those of our clients.
Integration
- In alignment with our clients’ financial objectives, we incorporate material ESG considerations throughout the stages of our investment and asset ownership lifecycles3
- We seek to strengthen the potential risk/reward profile of our clients’ portfolios
- We exercise rights to encourage best practices in sustainability factor reporting and management (e.g., proxy voting)
Stewardship
- We engage with companies to address sustainability-related challenges and enhance sustainability-related opportunities
- We seek to protect and enhance the value of assets we operate
Collaboration
- We seek to collaborate with organizations across the world to amplify our impact on global, systemic issues
- This work allows us to expand the scope of our sustainability-focused activity as we strive to build more resilient portfolios
Important disclosure
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.
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.
Our beliefs support our culture of stewardship
Sustainability factors can have a material impact on financial value
We believe sustainability factors can materially affect financial value; therefore, we integrate financially material ESG risks and opportunities into our investing process.4
Active managers have a stewardship advantage
We believe active managers are well placed to manage stewardship effectively, as we’re able to bring our experience to work with company management to encourage effective change aimed at enhancing the long-term value of client portfolios.
Where we operate assets, we believe it's our responsibility to pursue the best sustainability processes and standards for our clients, our firm, and our employees.
We believe in offering clients sustainable investing choices
We believe in offering choices to investors, from ESG integration to impact investments. A broad range of products and services enables investors to better meet an equally broad range of goals.
Important disclosures
4 We seek to incorporate material sustainability 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 sustainability factors into its investment process in a manner that best aligns with its investment approach. Exceptions to this are strategies where a sustainability integrated investment approach is impractical or impossible; for example, in relation to certain instrument types where sustainable comparable alternatives are unavailable, passive products, funds that invest in deriative instruments, products managed in accordance with specific client objectives, and delegation to third-party investment managers. Refer to Manulife Investment Management's sustainable investing and sustainability risk statement for further details.
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.
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
For illustrative purposes only.
Sustainable investing: why now?
As of 2022, US$30 trillion⁵ was invested globally in sustainable and responsible strategies, while in Canada almost half 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
US$2.4 trillion
Sustainable investing assets in Canada in 20225
47%
Of professionally managed assets in Canada are in responsible investments5
67%
Of surveyed investors in Canada want their financial advisors to inform them of sustainable investing options6
Important disclosures
5 Global Sustainable Investment Review 2022 – Global Sustainable Investment Alliance.
6 2023 RIA investor opinion survey.
Related viewpoints
April 29, 2022
What is ESG investing?
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.
May 14, 2024
The global water challenge: risks and opportunities that all investors should consider
Manulife Investment Management is committed to helping clients achieve their objectives, build resilient portfolios—including in relation to climate change—and, where appropriate, positively affect nature. We believe water-related risks and opportunities can be financially material factors that should be integrated into investment strategies and operational asset management.
May 14, 2024
It’s never too early to think long term—how investors can align with net zero by 2050
Many countries, cities, companies, and other institutions have joined forces to reduce global GHG emissions, but we believe investors also have a crucial role to play in achieving net zero by 2050. We expand on three key elements.
Important disclosures
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the fund facts as well as the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
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