ESG Case Study – Canadian Equity
At Fiera Capital, we understand the importance of both investing for long-term sustainability and maximizing returns for our clients. We firmly believe these two basic tenets are not in conflict. Given the various investment teams and asset classes that Fiera Capital manages within our platform, in order to integrate each of these basic tenets, all of our investment teams have the flexibility to determine how each assesses the materiality of Environmental, Social, and Governance (ESG) risk factors, and how they integrate this assessment of risk into their investment processes. We believe this flexible approach creates a more meaningful framework that enhances engagement on ESG risk factors within each team and reinforces a culture of continuous learning about risk management and sustainability throughout the firm.
But while it’s essential to explain our philosophy of ESG integration, we believe it’s equally important to demonstrate exactly how our teams have incorporated their ESG philosophy into their investment decisions. To that end, what follows is a sample of one of our teams’ recent investment process taken with a particular emphasis on ESG risk assessment.
Thomson Reuters: Doing More with Less
As investors, we view energy consumption as a somewhat unproductive cost. In daily production or service-delivery, an enterprising owner, we surmise, would largely prefer to produce more with less. While energy consumption is a necessary cost, it is one we wish could be reduced and minimized over time.
In contrast, costs like research and development, human capital development, marketing expenses, product investments and the like are potentially far more productive uses of cash. These costs might provide a return to the company or benefit employee culture, shareholders, and the community. Importantly, an ongoing focus on efficiency can, in our view, positively influence the long-term health and value of a business.
For many companies, energy consumption adds little to the long-term growth in business value. As long-term owners, we would much rather a company reduce its energy consumption annually and invest those savings into people development, R&D, new products and/ or sales-building activities. A material reduction in emissions intensity in parallel with an improvement in profitability and business value is something we observed at Thomson Reuters, one of the world’s premier data and information companies.
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2024 Climate Report
