Alberta Investment Management Corporation. An investor initiative in partnership with UNEP Finance Initiative and UN Global Compact

Transcription

1 RI TRANSPARENCY REPOR T Alberta Investment Management Corporation An investor initiative in partnership with UNEP Finance Initiative and UN Global Compact

2 About this report The PRI Reporting Framework is a key step in the journey towards building a common language and industry standard for reporting responsible investment (RI) activities. This RI Transparency Report is one of the key outputs of this Framework. Its primary objective is to enable signatory transparency on RI activities and facilitate dialogue between investors and their clients, beneficiaries and other stakeholders. A copy of this report will be publicly disclosed for all reporting signatories on the PRI website, ensuring accountability of the PRI Initiative and its signatories. This report is an export of the individual Signatory organisation s response to the PRI during the 2017 reporting cycle. It includes their responses to mandatory indicators, as well as responses to voluntary indicators the signatory has agreed to make public. The information is presented exactly as it was reported. Where an indicator offers a response option that is multiple-choice, all options that were available to the signatory to select are presented in this report. Presenting the information exactly as reported is a result of signatory feedback which suggested the PRI not summarise the information. As a result, the reports can be extensive. However, to help easily locate information, there is a Principles index which highlights where the information can be found and summarises the indicators that signatories complete and disclose. Understanding the Principles Index The Principles Index summarises the response status for the individual indicators and modules and shows how these relate to the six Principles for Responsible Investment. It can be used by stakeholders as an at-a-glance summary of reported information and to identify particular themes or areas of interest. Indicators can refer to one or more Principles. Some indicators are not specific to any Principle. These are highlighted in the General column. When multiple Principles are covered across numerous indicators, in order to avoid repetition, only the main Principle covered is highlighted. All indicators within a module are presented below. The status of indicators is shown with the following symbols: Symbol Status The signatory has completed all mandatory parts of this indicator The signatory has completed some parts of this indicator This indicator was not relevant for this signatory - The signatory did not complete any part of this indicator The signatory has flagged this indicator for internal review Within the table, indicators marked in blue are mandatory to complete. Indicators marked in grey are voluntary to complete. 1

3 Principles Index Organisational Overview Principle General Indicator Short description Status Disclosure OO 01 Signatory category and services Public OO 02 Headquarters and operational countries Public OO 03 Subsidiaries that are separate PRI signatories Public OO 04 Reporting year and AUM Public OO 05 Breakdown of AUM by asset class OO 06 How would you like to disclose your asset class mix Asset mix disclosed in OO 06 Public OO 07 Fixed income AUM breakdown Private OO 08 Segregated mandates or pooled funds Private OO 09 Breakdown of AUM by market Private OO 10 RI activities for listed equities Public OO 11 RI activities in other asset classes Public OO 12 Modules and sections required to complete OO End Module confirmation page - Public 2

4 Strategy and Governance Principle General Indicator Short description Status Disclosure SG 01 RI policy and coverage Public SG 02 Publicly available RI policy or guidance documents Public SG 03 Conflicts of interest Public SG 04 Private SG 05 RI goals and objectives Public SG 06 Main goals/objectives this year Private SG 07 RI roles and responsibilities Public SG 08 RI in performance management, reward and/or personal development Private SG 09 Collaborative organisations / initiatives Public SG 10 Promoting RI independently Public Dialogue with public policy makers or SG 11 Private standard setters SG 12 ESG issues in strategic asset allocation Public SG 13 SG 14 SG 15 SG 16 Long term investment risks and opportunity Allocation of assets to environmental and social themed areas ESG issues for internally managed assets not reported in framework ESG issues for externally managed assets not reported in framework Private Private Public Public SG 17 Innovative features of approach to RI Private SG End Module confirmation page - 3

5 Indirect Manager Selection, Appointment and Monitoring Principle General Indicator Short description Status Disclosure Role of investment consultants/fiduciary SAM 01 Public managers RI factors in selection, appointment and SAM 02 Public monitoring across asset classes Breakdown by passive, quantitative, SAM 03 Public fundamental and other active strategies SAM 04 ESG incorporation strategies Public SAM 05 Selection processes (LE and FI) Public SAM 06 SAM 07.1 SAM SAM 08 SAM 09 Evaluating engagement and voting practices in manager selection (listed equity/fixed income) Appointment processes (listed equity/fixed income) Appointment processes (listed equity/fixed income) Monitoring processes (listed equity/fixed income) Monitoring on active ownership (listed equity/fixed income) n/a Public Public Public n/a SAM 10 Percentage of (proxy) votes n/a SAM 11 SAM 12 Percentage of externally managed assets managed by PRI signatories Examples of ESG issues in selection, appointment and monitoring processes Private Public SAM 13 Disclosure of RI considerations Public SAM End Module confirmation page - 4

6 Direct - Listed Equity Incorporation Principle General Indicator Short description Status Disclosure LEI 01 Breakdown by passive, quantitative, fundamental and other active strategies Public LEI 02 Reporting on strategies that are <10% of actively managed listed equities Private LEI 03 Percentage of each incorporation strategy Public LEI 04 Type of ESG information used in investment decision Private LEI 05 Information from engagement and/or voting used in investment decisionmaking Private LEI 06 Types of screening applied Public LEI 07 Processes to ensure screening is based on robust analysis Public LEI 08 Processes to ensure fund criteria are not breached Private LEI 09 Types of sustainability thematic funds/mandates n/a LEI 10 Review ESG issues while researching companies/sectors Public LEI 11 Processes to ensure integration is based on robust analysis Private LEI 12 Aspects of analysis ESG information is integrated into Private LEI 13 ESG issues in index construction Private LEI 14 How ESG incorporation has influenced portfolio composition Private LEI 15 Measurement of financial and ESG outcomes of ESG incorporation Private LEI 16 Examples of ESG issues that affected your investment view / performance Private LEI 17 Disclosure of approach to ESG incorporation Public LEI End Module confirmation page - 5

7 Direct - Listed Equity Active Ownership Principle General Indicator Short description Status Disclosure LEA 01 Description of approach to engagement Public LEA 02 Reasoning for interaction on ESG issues Public LEA 03 Process for identifying and prioritising engagement activities Public LEA 04 Objectives for engagement activities Public LEA 05 Process for identifying and prioritising collaborative engagement Public LEA 06 Objectives for engagement activities Public LEA 07 Role in engagement process n/a LEA 08 LEA 09 Monitor / discuss service provider information Share insights from engagements with internal/external managers n/a Private LEA 10 Tracking number of engagements Public LEA 11 Number of companies engaged with, intensity of engagement and effort Private LEA 12 Engagement methods Private LEA 13 Engagements on E, S and/or G issues Private LEA 14 Companies changing practices / behaviour following engagement Private LEA 15 Examples of ESG engagements Private LEA 16 Disclosure of approach to ESG engagements Public LEA 17 Voting policy & approach Public LEA 18 Typical approach to (proxy) voting decisions Public LEA 19 Percentage of voting recommendations reviewed n/a LEA 20 Confirmation of votes Private LEA 21 Securities lending programme Private LEA 22 Informing companies of the rationale of abstaining/voting against management Public LEA 23 Percentage of (proxy) votes cast Public LEA 24 Proportion of ballot items that were for/against/abstentions Public LEA 25 Shareholder resolutions Private LEA 26 Examples of (proxy) voting activities Private LEA 27 Disclosing voting activities Public LEA End Module confirmation page - 6

8 Direct - Fixed Income Principle General Indicator Short description Status Disclosure FI 01 Breakdown by passive,active strategies Private FI 02 Option to report on <10% assets n/a FI 03 Breakdown by market and credit quality Private FI 04 Incorporation strategies applied Public FI 05 ESG issues and issuer research Private FI 06 Processes to ensure analysis is robust Public FI 07 Types of screening applied Public FI 08 Negative screening - overview and rationale Public FI 09 Examples of ESG factors in screening process Private FI 10 Screening - ensuring criteria are met Public FI 11 Thematic investing - overview n/a FI 12 Thematic investing - themed bond processes n/a FI 13 Thematic investing - assessing impact n/a FI 14 Integration overview Public FI 15 Integration - ESG information in investment processes Public FI 16 Integration - E,S and G issues reviewed Public FI 17 ESG incorporation in passive funds n/a FI 18 Engagement overview and coverage Private FI 19 Engagement method n/a FI 20 Engagement policy disclosure n/a FI 21 Financial/ESG performance Private FI 22 Examples - ESG incorporation or engagement Private FI 23 Communications Public FI End Module confirmation page - 7

9 Direct Private Equity Principle General Indicator Short description Status Disclosure PE 01 Breakdown of investments by strategy Private PE 02 Typical level of ownership Private PE 03 Description of approach to RI Private PE 04 Investment guidelines and RI Public PE 05 Fund placement documents and RI Public PE 06 Formal commitments to RI Private PE 07 Incorporating ESG issues when selecting investments Public PE 08 Types of ESG information considered in investment selection Public PE 09 Encouraging improvements in investees Private PE 10 ESG issues impact in selection process Private PE 11 Proportion of companies monitored on their ESG performance Public PE 12 Proportion of portfolio companies with sustainability policy Public PE 13 Actions taken by portfolio companies to incorporate ESG issues into operations Private PE 14 Type and frequency of reports received from portfolio companies Private PE 15 Disclosure of ESG issues in pre-exit Private PE 16 PE 17 PE 18 ESG issues affected financial/esg performance Examples of ESG issues that affected your PE investments Disclosure of ESG information to public and clients/beneficiaries Private Private Public PE 19 Approach to disclosing ESG incidents Private PE End Module confirmation page - 8

10 Direct - Property Principle General Indicator Short description Status Disclosure PR 01 Breakdown of investments Private PR 02 Breakdown of assets by management Private PR 03 Largest property types Private PR 04 Responsible Property Investment (RPI) policy Public PR 05 Fund placement documents and RI Public PR 06 Formal commitments to RI Private PR 07 Incorporating ESG issues when selecting investments Public PR 08 Types of ESG information considered in investment selection Private PR 09 ESG issues impact in selection process Public PR 10 ESG issues in selection, appointment and monitoring of third-party property managers Public PR 11 ESG issues in post-investment activities Public PR 12 Proportion of assets with ESG targets that were set and monitored Public PR 13 Certification schemes, ratings and benchmarks Private PR 14 Proportion of developments and refurbishments where ESG issues were Public considered PR 15 Proportion of property occupiers that were engaged with Public PR 16 Proportion of green leases or MOUs referencing ESG issues Private PR 17 Proportion of assets engaged with on community issues Private PR 18 ESG issues affected financial/esg performance Private PR 19 Examples of ESG issues that affected your property investments Private PR 20 Disclosure of ESG information to public and clients/beneficiaries Public PR End Module confirmation page - 9

11 Direct - Infrastructure Principle General Indicator Short description Status Disclosure INF 01 Breakdown of investments Private INF 02 Breakdown of assets by management Private INF 03 Largest infrastructure Private INF 04 Description of approach to RI Private INF 05 Responsible investment policy for infrastructure Public INF 06 Fund placement documents and RI Public INF 07 Formal commitments to RI Private INF 08 Incorporating ESG issues when selecting investments Public INF 09 ESG advice and research when selecting investments Private INF 10 Examples of ESG issues in investment selection process Public INF 11 Types of ESG information considered in investment selection Private INF 12 ESG issues impact in selection process Private ESG issues in selection, appointment INF 13 n/a and monitoring of third-party operators INF 14 ESG issues in post-investment activities Public INF 15 INF 16 INF 17 INF 18 INF 19 INF 20 INF 21 INF 22 Proportion of assets with ESG performance targets Proportion of portfolio companies with ESG/sustainability policy Type and frequency of reports received from investees Proportion of maintenance projects where ESG issues were considered Proportion of stakeholders that were engaged with on ESG issues ESG issues affected financial/esg performance Examples of ESG issues that affected your infrastructure investments Disclosure of ESG information to public and clients/beneficiaries Public Public Private Public Private Private Private Public INF 23 Approach to disclosing ESG incidents Private INF End Module confirmation page - 10

12 Alberta Investment Management Corporation Reported Information Public version Organisational Overview PRI disclaimer This document presents information reported directly by signatories. This information has not been audited by the PRI Secretariat or any other party acting on their behalf. While this information is believed to be reliable, no representations or warranties are made as to the accuracy of the information presented, and no responsibility or liability can be accepted for any error or omission. 11

13 Basic Information OO 01 Mandatory Public Gateway/Peering General OO 01.1 Select the services you offer. Fund management % of assets under management (AUM) in ranges <10% 10-50% >50% Fund of funds, manager of managers, sub-advised products % of assets under management (AUM) in ranges <10% 10-50% >50% Other, specify Execution and advisory services OO 02 Mandatory Public Peering General OO 02.1 Select the location of your organisation s headquarters. Canada OO 02.2 Indicate the number of countries in which you have offices (including your headquarters) >10 OO 02.3 Indicate the approximate number of staff in your organisation in full-time equivalents (FTE). FTE 360 OO 03 Mandatory Public Descriptive General 12

14 OO 03.1 Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right. Yes No OO 04 Mandatory Public Gateway/Peering General OO 04.1 Indicate the year end date for your reporting year. 31/12/2016 OO 04.2 Indicate your total AUM at the end of your reporting year, excluding subsidiaries you have chosen not to report on. trillions billions millions thousands hundreds Total AUM Currency CAD Assets in USD OO 06 Mandatory Public Descriptive General New selection options have been added to this indicator. Please review your prefilled responses carefully. OO 06.1 How you would like to disclose your asset class mix. as percentage breakdown as broad ranges Internally managed (%) Externally managed (%) Listed equity 10-50% <10% Fixed income 10-50% 0 Private equity <10% <10% Property 10-50% <10% Infrastructure <10% <10% Commodities 0 0 Hedge funds 0 <10% 13

15 Forestry <10% <10% Farmland 0 0 Inclusive finance 0 0 Cash 0 0 Other (1), specify 0 0 Other (2), specify 0 0 OO 06.2 Publish our asset class mix as per attached image [Optional]. Gateway asset class implementation indicators OO 10 Mandatory Public Gateway General OO 10.1 Select the direct or indirect ESG incorporation activities your organisation implemented for listed equities in the reporting year. We incorporate ESG in our investment decisions on our internally managed assets We address ESG incorporation in our external manager selection, appointment and/or monitoring processes We do not incorporate ESG in our directly managed listed equity and/or we do not address ESG incorporation in our external manager selection, appointment and/or monitoring processes. OO 10.2 Select the direct or indirect engagement activities your organisation implemented for listed equity in the reporting year. We engage with companies on ESG factors via our staff, collaborations or service providers We require our external managers to engage with companies on ESG issues on our behalf We do not engage directly and do not require external managers to engage with companies on ESG factors. OO 10.3 Select the direct or indirect voting activities your organisation implemented for listed equity in the reporting year We cast our (proxy) votes directly or via dedicated voting providers We require our external managers to vote on our behalf We do not cast our (proxy) votes directly and do not require external managers to vote on our behalf OO 11 Mandatory Public Gateway General 14

16 OO 11.1 Select the internally managed asset classes in which you addressed ESG incorporation into your investment decisions and/or your active ownership practices (during the reporting year). Fixed income SSA Fixed income corporate (financial) Fixed income corporate (non-financial) Fixed income securitised Private equity Property Infrastructure Forestry None of the above OO 11.2 Select the externally managed assets classes where you addressed ESG incorporation and/or active ownership in your external manager selection, appointment and/or monitoring processes (during the reporting year) Private equity Property Infrastructure Hedge funds Forestry None of the above OO 12 Mandatory Public Gateway General You will need to make a selection in OO 12.1onlyif you have any voluntary modules that you can choose to report on. OO 12.1 Select from below any additional applicable modules or sections you would like to report on voluntarily. You are only required to report on asset classes that represent 10% or more of your AUM. Core modules Organisational Overview Strategy and Governance RI implementation directly or via service providers Direct - Listed Equity incorporation Listed Equity incorporation 15

17 Engagements (Proxy) voting Direct - Listed Equity active ownership Direct - Fixed Income Fixed income - SSA Fixed income - Corporate (financial) Fixed income - Corporate (non-financial) Fixed income - Securitised Direct - Other asset classes with dedicated modules Private Equity Property Infrastructure RI implementation via external managers Indirect - Selection, Appointment and Monitoring of External Managers Listed Equities Private Equity Property Infrastructure Closing module Closing module OO 12.2 Additional information. [Optional] No asset class under Direct -fixed income; Direct - other asset classes; and Indirect - SAM of External Managers represent 10% or more of our AUM. 16

18 Alberta Investment Management Corporation Reported Information Public version Strategy and Governance PRI disclaimer This document presents information reported directly by signatories. This information has not been audited by the PRI Secretariat or any other party acting on their behalf. While this information is believed to be reliable, no representations or warranties are made as to the accuracy of the information presented, and no responsibility or liability can be accepted for any error or omission. 17

19 Investment policy SG 01 Mandatory Public Core Assessed General New selection options have been added to this indicator. Please review your prefilled responses carefully. SG 01.1 Indicate if you have an investment policy that covers your responsible investment approach. Yes SG 01.2 Indicate the components/types and coverage of your policy. Select all that apply Policy components/types Policy setting out your overall approach Formalised guidelines on environmental factors Formalised guidelines on social factors Formalised guidelines on corporate governance factors Asset class-specific RI guidelines Sector specific RI guidelines Screening / exclusions policy Engagement policy (Proxy) voting policy Other, specify (1) Other, specify(2) Coverage by AUM Applicable policies cover all AUM Applicable policies cover a majority of AUM Applicable policies cover a minority of AUM 18

20 SG 01.4 Indicate what norms you have used to develop your investment policy that covers your responsible investment approach. No UN Global Compact Principles UN Guiding Principles on Business and Human Rights Universal Declaration of Human Rights International Bill of Human Rights International Labour Organization Conventions United Nations Convention Against Corruption OECD Guidelines for Multinational Enterprises Other, specify (1) Other, specify (2) Other, specify (3) None of the above SG 01.6 Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional] Key elements: To uphold internationally accepted norms of corporate behaviour by promoting compliance by investee companies with norms advocated by international organizations such as UNCTAD, ILO, UNHCR, UN Global Compact, and ICGN; and with Canadian organizations such as CCGG To decrease ESG investment risk across investment portfolios, and to increase risk-adjusted investment performance for our client beneficiaries To promote best corporate ESG practices To uphold our AIMCo's fiduciary duty to our clients to maximize investment returns without undue risk of loss by actively considering ESG risk and return factors To align with the UNPRI and with AIMCo's RI pillars SG 02 Mandatory Public Core Assessed PRI 6 New selection options have been added to this indicator. Please review your prefilled responses carefully. SG 02.1 Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document. Policy setting out your overall approach URL URL/Attachment 19

21 URL 20Oct% pdf Attachment (will be made public) Asset class-specific RI guidelines Screening / exclusions policy URL URL/Attachment URL %20Investment%20Exclusion%20%20Guidelines%20-%20January%202017%20FINAL%20approved.pdf Attachment (will be made public) Engagement policy URL URL/Attachment URL 20Guidelines%20June% pdf Attachment (will be made public) (Proxy) voting policy URL URL/Attachment URL elines%20june%202016%20after%20july%2011%20revision.pdf Attachment (will be made public) We do not publicly disclose our investment policy documents SG 02.4 Additional information [Optional]. In addition, AIMCo Clients make SIP&G's publicly available. AIMCo's asset class sustainability guidelines are considered proprietary and are so not made public. 20

22 SG 03 Mandatory Public Core Assessed General SG 03.1 Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process. Yes SG 03.2 Describe your policy on managing potential conflicts of interest in the investment process. The AIMCo Code of Conduct and Ethical Standards outlines the policy for managing potential conflicts of interest in the investment process. To prevent conflicts of interest AIMCo has developed personal trading procedures which include pre-clearing trades in certain securities, disclosing trading activity and holdings and providing source documentation evidencing those activities as required. In addition, AIMCo directors, officers, employees, agents, consultants and contract workers are responsible for disclosing any instances where they possess, or are likely to possess, insider information so that appropriate trading restrictions can be put into place. Employees are required to avoid any relationship, influence, or activity that in fact, or in appearance, may impair one's ability to make objective and fair decisions impacting job performance. If a conflict of interest or a potential conflict arises, individuals are required to report it to the Chief Compliance Officer as soon as possible so that steps may be taken to resolve the situation. As a term of employment at AIMCo all employees sign an agreement stating they will abide by the Code of Conduct and pass a test to ensure familiarity. The Compliance department is responsible for overseeing and administering the Code of Conduct. No Objectives and strategies SG 05 Mandatory Public Gateway/Core Assessed General SG 05.1 Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities. Quarterly or more frequently Biannually Annually Less frequently than annually Ad-hoc basis It is not reviewed SG 05.2 Additional information. [Optional] The Responsible Investment Department sets objectives annually, which are reviewed and approved by the CIO, and the Responsible investment Committee, annually and the RI committee reviews progress quarterly. Governance and human resources 21

23 SG 07 Mandatory Public Core Assessed General SG 07.1 Indicate the roles present in your organisation and for each, indicate whether they have oversight and/or implementation responsibilities for responsible investment. Roles present in your organisation Board members or trustees Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Chief Executive Officer (CEO), Chief Investment Officer (CIO), Investment Committee Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Other Chief-level staff or head of department, specify Portfolio managers Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Investment analysts Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Dedicated responsible investment staff Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment External managers or service providers Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Investor relations Other role, specify (1) Other role, specify (2) SG 07.2 For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities. Board: Owns and approves the RI Policy. Receives updates on RI activities, performance and progress as requested. CEO: The CEO is chair of the RI committee, an internal committee comprised of department heads, senior VP's and designated department representatives. CIO: The RI department reports directly to the CIO, thereby ensuring RI demonstrates the business case for RI, following agreed upon, fit for purpose strategies for each investment department. RI Director reports once every 2 weeks or more often as needed. 22

24 RI Committee/Investment Committee: RI reports quarterly to the RI Committee. CEO (as the Chair of the RI Committee) reports to the Investment Committee on an as needed basis. Portfolio managers/investment Analysts: PMs must uphold exclusions; are consulted on votes for the companies on our strategic watch list. RI makes RI data available to all PMs and Analysts as needed. RI dedicated staff: RI staff work to implement AIMCO's RI pillars which include: (1) RI structure; (2) Investment process [including proxy voting and investment research across portfolios]; (3) Engagements with companies [including identification of companies that fit our ESG focus areas and/or strategic watch list]; (4) Reporting and Communications; (5) Collaboration and Advocacy [including interactions with the policy-makers, regulators and investor peers]. In addition, RI staff is responsible for RI-related training across pillars above. SG 07.3 Indicate the number of dedicated responsible investment staff your organisation has. Number 3.25 SG 07.4 Additional information. [Optional] AIMCo employs a summer student from May to August. Promoting responsible investment SG 09 Mandatory Public Core Assessed PRI 4,5 New selection options have been added to this indicator. Please review your prefilled responses carefully. SG 09.1 Select the collaborative organisation and/or initiatives of which your organisation is a member or in which it participated during the reporting year, and the role you played. Select all that apply Principles for Responsible Investment Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced 23

25 Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] We are active participants on the methane advisory committee and on the advisory committee for the UNSDGs'. Fiona Reynolds presented at the AIMCo client symposium in Fall 2016 AFIC La Commission ESG Asian Corporate Governance Association Australian Council of Superannuation Investors BVCA Responsible Investment Advisory Board CDP Climate Change Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced AIMCo is a signatory to CDP. Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] CDP Forests CDP Water Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] AIMCo is a signatory to CDP Water CFA Institute Centre for Financial Market Integrity Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced 24

26 Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] Many employees are members of the CFA Institute. Code for Responsible Investment in SA (CRISA) Code for Responsible Finance in the 21st Century Council of Institutional Investors (CII) ESG Research Australia Eumedion EVCA Responsible Investment Roundtable Extractive Industries Transparency Initiative (EITI) Global Investors Governance Network (GIGN) Global Impact Investing Network (GIIN) Global Real Estate Sustainability Benchmark (GRESB) Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] AIMCo is an investor co-founder of the GRESB infrastructure initiative, and sits on the Infrustructure Advisory Board. We are investor members of GRESB on both the real estate side and the infrastructure side and our real estate department earned a green star ranking for the ESG performance of participating assets (all N.America.) On the infrastructure side, we had several assets and funds participate in the first survey iteration and we continue to monitor progress and give feedback to GRESB. AIMCo fundamentally believes that, given their long-term horizon, the fixed location of physical assets, and the societal impact of infrastructure investments, sustainability and broader ESG considerations are critically important to infrastructure investors. Green Bond Principles Institutional Investors Group on Climate Change (IIGCC) Interfaith Center on Corporate Responsibility (ICCR) International Corporate Governance Network (ICGN) Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced 25

27 Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] Active membership in the Shareholder Responsibility Committee (SHREC) and in the Fiduciary Duty and Board Diversity sub-committees with the aim of contributions to the development of a future fiduciary model mandate for ICGN; and we co-authored their recent Guidance on Board Diversity. Investor Group on Climate Change, Australia/New Zealand (IGCC) International Integrated Reporting Council (IIRC) Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] We have spoken at functions promoting the integration of ESG considerations into financial statements in support of IIRC. Investor Network on Climate Risk (INCR)/CERES Local Authority Pension Fund Forum Principles for Sustainable Insurance Regional or National Social Investment Forums (e.g. UKSIF, Eurosif, ASRIA, RIAA), specify Responsible Finance Principles in Inclusive Finance Shareholder Association for Research and Education (Share) Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] AIMCo's participation is moderate- we actively participated in advocacy efforts led by SHARE on say on pay in United Nations Environmental Program Finance Initiative (UNEP FI) United Nations Global Compact Other collaborative organisation/initiative, specify Responsible Investment Association (RIA) 26

28 Your organisation s role in the initiative during the reporting year (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional]. Other collaborative organisation/initiative, specify Pension Investment Association of Canada (PIAC) Your organisation s role in the initiative during the reporting year (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] AIMCo has several PIAC members, who sit on various committees and has been very active in facilitating PIAC responses to proposed changes to regulation Other collaborative organisation/initiative, specify Canadian Coalition of Good Governance (CCGG) Your organisation s role in the initiative during the reporting year (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] Our CEO is an active participant on the Public Policy Committee Other collaborative organisation/initiative, specify Proxy Voting Working Groups (2) Your organisation s role in the initiative during the reporting year (see definitions) Basic Moderate Advanced 27

29 Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] AIMCo has actively participated in two separate proxy voting initiatives tasked with improving the end to end audit capabilities for the proxy voting process. One initiative is called The Proxy Voting Working Group, comprised of several Canadian institutional investors whereas the other is called The Proxy Voting Technical Working Group, comprised of representatives of several intermediaries (Broadridge, State Street, STAC, etc.) SG 10 Mandatory Public Core Assessed PRI 4 SG 10.1 Indicate if your organisation promotes responsible investment, independently of collaborative initiatives. Yes SG 10.2 Indicate which of the following actions your organisation has taken to promote responsible investment, independently of collaborative initiatives. No Provided or supported education or training programmes for clients, investment managers, broker/dealers, investment consultants, legal advisers or other investment organisations Provided financial support for academic or industry research on responsible investment Encouraged better transparency and disclosure of responsible investment practices across the investment industry Spoke publicly at events and conferences to promote responsible investment Wrote and published in-house research papers on responsible investment Encouraged the adoption of the PRI Wrote articles on responsible investment in the media. Other, specify SG 10.3 Describe any additional actions and initiatives that your organisation has taken part in during the reporting year to promote responsible investment [Optional] AIMCo's CEO presented at The Inclusive Capitalism conference last Fall. AIMCo's RI director presented at University of Alberta MBA classes; contributed to the ICGN's Diversity Guidance 2016 publication; AIMCo continues to submit public commentaries and private letters to policy makers advocating for general improvements in corporate governance protocols, such as allowing shareholders the right to vote against directors in Canada. Implementation not in other modules SG 12 Mandatory Public Descriptive PRI 1 New selection options have been added to this indicator. Please review your prefilled responses carefully. 28

30 SG 12.1 Indicate if your organisation executes scenario analysis and/or modelling in which the risk profile of future ESG trends at portfolio level is calculated. We execute scenario analysis which includes factors representing the investment impacts of future environmental trends We execute scenario analysis which includes factors representing the investment impacts of future social trends We execute scenario analysis which includes factors representing the investment impacts of future governance trends We execute other scenario analysis, specify We do not execute such scenario analysis and/or modelling SG 12.2 Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets. We do the following We do not consider ESG issues in strategic asset allocation SG 12.3 Additional information. [OPTIONAL] SG 15 Mandatory Public Descriptive General SG 15.1 Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold. 29

31 Asset Class Fixed income - Corporate (financial) Describe what processes are in place and the outputs or outcomes achieved Although ESG ratings are embedded in Ratings Reports from the ratings agencies (DBRS, Standard & Poor's and Moody's Investors Services) the fixed income analysts develop their own notional rating based on the company's credit strengths, weaknesses, a business risk profile (management strategy, market positon and profitability), a financial risk profile and the company's rating outlook-stable, negative or positive. The goal of assigning our own Notional ratings is to not be overly reliant on rating agency opinions, while trying to add value by discovering credit dislocations - seeing things that others do not. Hence, in all of our reports, but especially with respect to event-driven reviews, we comment on how developments impact our Notional rating. We always strive to be forward-looking and to compare our Notional ratings to spreads and public ratings, so as to allow PMs to better gauge risk/reward. Fixed income - Securitised The performance and corporate behaviour of the underlying assets in ABS structures is key. The single best predictor of losses is delinquencies. Losses lag delinquencies and ratings lag losses. Support features such as over collaterization, spread account, reserve funds and other credit enhancements are also taken into account. Forestry Screening: We employ a country and species screen (natural forest vs. plantation), forest certification, and a reasonableness check for sustainability (growth versus harvest schedule versus standing tree inventory) Diligence: We ensure verification of legal land ownership status, compliance with all local laws including environmental reserves and labor laws, environmental due diligence, inventory verification (sustainable harvest), confirmation of forest certification status, governance rights and holding structures Confirmation: of all due diligence materials and internal processes Deal breaker: If investment opportunities are not seen to be sustainable, or fail one of the previous three steps. There is an expectation for our external investment professionals to follow industry best-practices - which includes third party certification, and those systems must audit ESG criteria regularly. SG 16 Mandatory Public Descriptive General SG 16.1 Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold. 30

32 Asset Class Forestry Describe what processes are in place and the outputs or outcomes achieved All external managers are subject to an investment management agreement, and are not allowed to invest in certain excluded industries, such as the tobacco industry, or in certain companies, as per the terms of the agreement and our exclusions guidelines. If they inadvertently were to invest in an excluded company, our Compliance department would flag it, and the external manager would be required to sell the holdings in the entity. This incident and the underlying reasons for it would then be reported internally in order to avoid future occurrences, The external manager must regularly check with Compliance to ensure that an entity that was not previously on the exclusions list has entered the exclusions list. Only managers with sound management record would be considered. Our external investment professionals are expected to follow industry best-practices. AIMCo timber team regularly have meetings with selected managers and receive Operations Reports covering areas such as Work Place Safety, Environmental Protection, Human Resources, Community Involvement and Consultation to ensure standards set for these practice areas are fully implemented and upheld. SG 16.2 Additional information. Our external investment professionals are expected to follow industry best-practices, which include upholding forest management standards administered by respective authorities, third party certification, and systematic reporting. Many employees of the selected managers are Registered Professional Forester (RPF) with a higher mandate to maintain productivity and sustainability of forest lands, improve the practice of forest management, and generally to foster public safety, health and welfare. 31

33 Alberta Investment Management Corporation Reported Information Public version Indirect Manager Selection, Appointment and Monitoring PRI disclaimer This document presents information reported directly by signatories. This information has not been audited by the PRI Secretariat or any other party acting on their behalf. While this information is believed to be reliable, no representations or warranties are made as to the accuracy of the information presented, and no responsibility or liability can be accepted for any error or omission. 32

34 Overview SAM 01 Mandatory Public Core Assessed PRI 4 New selection options have been added to this indicator. Please review your prefilled responses carefully. SAM 01.1 Indicate whether your organisation uses investment consultants and/or fiduciary managers. Yes, we use investment consultants Yes, we use a fiduciary manager that delegates management of some or all of our assets to third-party managers. No, we do not use investment consultants or fiduciary managers. SAM 02 Mandatory Public Gateway PRI 1 SAM 02.1 Indicate for which of the following externally managed asset classes your organisation, and/or your investment consultants, consider responsible investment factors in investment manager: (a) Selection, (b) Appointment (investment management agreements/contracts), and (c) Monitoring Select all that apply Asset classes (a) Selection (b) Appointment (c) Monitoring Listed equity Private equity Property Infrastructure 33

35 SAM 02.2 Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes. Public Equities: All external managers are subject to a thorough due diligence process including detailed questions regarding the firm's governance, including, but not limited to: evidence of written policies covering potential conflicts of interest, evidence of protocols to deal with issues of material non- public financial information, evidence of the robustness of the firm's compliance function, it's risk management processes, and an accounting its own due diligence processes. AIMCO's external investment managers must sign an Investment Management Agreement (IMA). The IMA states that AIMCo's exclusions will apply to all direct investments made by external managers on behalf of AIMCo. Exclusions outlined in the IMA include Excluded Industries and Statutory Investment Restrictions. Excluded Industries variously include issuers in the tobacco industry, and manufacturers of landmines, nuclear explosive devices and cluster munitions. Statutory Investment Restrictions include the Special Economic Measures Act (SEMA) and the United Nations Act (UNA). The same restrictions are specified in side letters to our hedge funds and collective mandates in order to ensure consistency across managers. Various asset classes such as real estate may have further ESG considerations, which the external managers must also address. External investment managers report to AIMCo regarding investment performance and risk issues including ESG risk on a regular basis (from monthly to quarterly). Several external managers produce their own RI reports. Real Estate: AIMCo's selection, appointment and monitoring of third party property managers is usually conducted through a tendering process with multiple evaluation criteria. ESG and sustainability criteria are reviewed as a component of the track record of the third party manager, but not necessarily broken out as a separate scoring factor. A comprehensive due diligence questionnaire assessing the overall ability of the manager, including their involvement in responsible investment is always requested. Infrastructure/Private Equity General: We assess the governance competency of external fund managers. Generally, LP agreements between AIMCo and a Private Equity fund contain responsible investing guidelines. Infrastructure General: When AIMCo participates in an external fund advisory committee, we provide further assessment and review on the advisory board function of the fund. AIMCo performs ongoing review of fund performance from the reporting materials provided by the funds and also requests separate meetings/ calls with the funds to answer any specific questions we may have. SAM 02.3 Additional information. [Optional] AIMCo manages responsible investing at Private Equity funds by exception. For example, if a Private Equity fund violates a responsible investing guideline in the LP agreement, the fund is required to report the exception to the LPs. The LPs decide on a course of action, but very rarely has a Private Equity fund violated a responsible investing guideline in the LP agreement. Listed Equity and Fixed Income Strategies SAM 03 Mandatory to Report Voluntary to Disclose Public Gateway General SAM 03.1 Provide a breakdown of your externally managed listed equities and fixed income by passive, active quant and, active fundamental and other active strategies. 34

36 Listed equity (LE) Passive 0 Active - quantitative (quant) 17 Active - fundamental and active - other % SAM 04 Mandatory Public Gateway PRI 1,2 SAM 04.1 Indicate which of the following ESG incorporation strategies you require your external manager(s) to implement on your behalf: Active investment strategies Active investment strategies Screening Thematic Integration None of the above Listed Equity Selection SAM 05 Mandatory Public Core Assessed PRI 1 SAM 05.1 Indicate what RI-related information your organisation typically covers in the majority of selection documentation for your external managers 35

37 LE Private equity Property Infrastructure Investment strategy and how ESG objectives relate to it ESG incorporation requirements ESG reporting requirements Other No RI information covered in the RFPs If you select any 'Other' option(s), specify Public Equities: External long only equity managers must adhere to AIMCo's exclusions for certain Excluded Industries (tobacco manufacturers, and manufacturers of landmines, nuclear explosive devices or cluster munitions) and Statutory Investment Restrictions (Special Economic Measures Act and the United Nations Act). SAM 05.2 Explain how your organisation evaluates the investment manager s ability to align between your investment strategy and their investment approach Strategy LE Private equity Property Infrastructure Assess the time horizon of the investment manager s investment strategy Assess the quality of investment policy and its reference to ESG Assess the investment approach and how ESG objectives are implemented in the investment process (asset class specific) Assess the ESG definitions to be used Other None of the above 36