This past year has allowed us to analyze the latest developments in responsible investment and to look at various elements that could be integrated into FÉRIQUE Fund Management’s current approach. In keeping with our commitment to put the PRI precepts in practice, several efforts were made during the year.
The exercise of proxy voting rights allows shareholders to have a positive influence on the companies they invest in and is therefore central to the action taken by FÉRIQUE Fund Management. The three main principles defining our policy are long-term profitability, accountability and transparency.
Updating our Voting Rights Policy
In order to update our policy, we reviewed the latest changes and recommendations regarding the exercise of voting rights around the world. This exercise has allowed us to confirm that our policy is still at the cutting edge of best practices. The few minor changes, mainly made to the board of directors section, ensure that we keep the policy in the forefront and maximize its power of influence.
In 2018, The FÉRIQUE Funds exercised their voting rights on 5,431 proposals in 409 shareholder meetings.
In 54% of cases, we supported the recommendations submitted by the boards of directors. Our dissent focused on the election of board members and executive compensation, which was not aligned with shareholder interests. The increase in the percentage of votes in accordance with the boards of directors demonstrates an improvement in corporate practices and a better alignment between their interests and those of the shareholders.
The organization contributes to improving practices by integrating environmental, social and governance (ESG) criteria in its overall approach to investment risk management. This approach is primarily pragmatic: we strive to improve our practices from a collaborative perspective, considering extra-financial factors, rather than focusing on the exclusion of securities and thus losing our power of influence.
In 2018, ten of the eleven managers of the FÉRIQUE Funds were PRI signatories and thus committed to include the ESG criteria in their investment approach and decisions.
Extra-financial factors are an essential complement to the traditional analysis done by portfolio managers. FÉRIQUE Fund Management therefore ensures that it is well aware of the responsible investment policies and practices of the managers to whom it entrusts mandates. As such, the diligent reviews of the year have allowed us to see the very high level of ESG expertise of some of our managers.
As every year, we obtained a report from all our managers presenting the evolution of their practices in 2018. All stock portfolios were reassessed on the basis of ESG risks. This approach improves our monitoring and allows us to identify certain securities at risk and to discuss them with the managers.
Shareholder engagement involves bringing the companies in our portfolios to improve their ESG practices. In 2018, we again used Aequo, a shareholder engagement services firm.
In addition to following discussions initiated last year with Barrick Gold, Dollarama and Dollar General (in the United States), dialogues were initiated with Suncor Energy, TransCanada, Scotiabank and Southern Company (in the United States).
Aequo also participated in various collaborative investor initiatives on a variety of topics. These initiatives generally aim to raise awareness among businesses about certain issues and to improve information disclosure or to establish best practices. Being represented by Aequo allows us to join forces with other investors to increase our influence.
Activity Reports on Responsible Investment
(PRI Transparency report)
PRI signatories are required to report annually on their responsible investment activities. This ensures: