This one-day seminar, co-hosted by SFU’s Centre for Corporate Governance and Sustainability and UBC’s Peter P. Dhillon Centre for Business Ethics, featured presentations from a range of professionals working within the Responsible Investing space, all aimed at helping students understand how to address ESG factors in the selection of securities.

In July 2014, Simon Fraser University’s endowment became a signatory of the United Nations Principles for Responsible Investment (the UN PRI). At the time, SFU was only the second Canadian university to do so. This commitment includes the endowment fund managed by our two student-managed investment funds.

The graduate student fund, SIAS, the Student Investment Advisory Service, manages over $16 million of the university’s endowment portfolio funded by contributions from HSBC Bank Canada and the Lohn Foundation. The SIAS Fund is Canada’s largest student-run investment fund, and is one of the largest such funds in North America. Our undergraduate students also manage the Beedie Endowment Asset Management (BEAM) fund. Founded in 2011 with the generous support of the Beedie family, Beedie Endowment Asset Management (BEAM) is a $6 million investment fund run entirely by undergraduate students from Simon Fraser University’s Beedie School of Business. Again, BEAM is one of the largest undergraduate student-run investment funds in Canada, with $6 million invested in Canadian equities, fixed income, and cash. The student managers in both of these funds are in the process of incorporating ESG factors into their management process.

While the workshop was primarily directed at student asset managers in these two funds, we were delighted to be joined also by students from UBC’s Sauder School of Business and students from SFU’s MBA and MOT programs. In total, we had 50 students join the one-day session.

The first part of the day sought to establish the foundations of ESG valuations, from the perspective of an analyst undertaking the valuation. Christie Stephenson, Executive Director of the Peter P. Dhillon Centre for Business Ethics, began the day by outlining what Responsible Investing is and is not, the differences in terminology used within this sector and different ESG valuation strategies. Christie was followed by Heather Hachigian, a Senior Consultant at Purpose Capital, who took students through some of the more detailed key issues and questions that can form part of the ESG valuation process.

The focus of the event then switched to the source of ESG data used within valuations. Leading this discussion was Dara Edmonds, a CSR Specialist at Port Metro Vancouver. Dara outlined what drives an organisation to collect certain types of ESG data and the processes and timelines for collating it. Dara then used Port Metro Vancouver’s sustainability report to illustrate how this data can then be presented and tailored to suit the particular organisation’s stakeholders.

Christie Stephenson followed Dara’s presentation and turned the focus back the ESG valuation process, taking students through a more detailed overview of various ESG valuation processes that could be deployed by analysts. Now that the students had firmer grounding in the “how”, all that was left was to discuss the “where”. Where could students go to get reliable ESG data needed to complete their valuations? This task was given to Glenn Power, Senior Portfolio Manager, Global Thematic at bcIMC who help to navigate students through the data sources and power offered within Bloomberg.

The day concluded with a panel discussion between Christie Stephenson, Glen Power and Omar Dominguez, Director of Operations and Sustainability at Happy City. The panel shared additional knowledge and experience with the students based on their professional careers before opening up the floor to take questions from students.

Three key take ways from the day included:

• There is not necessarily a right or wrong way to approach to responsible investing, the key is to develop a clear framework that structures and underpins your investment decisions. Asset managers need to develop a strategy for how they will integrate ESG considerations into their initial stock selection, their reviews, and their criteria for sell decisions;
• Metrics and data collected during an ESG valuation should not be viewed as the final answer; they should form the starting point – asset managers need to build their familiarity and understanding of a company’s ESG track record over time; and
• Responsible Investing is still about generating returns, ESG can be an effective lens to uncover long-term profitability.

Both the Centre for Corporate Governance and Sustainability and the Peter P. Dhillon Centre for Business Ethics would like to thank the presenters who gave up their time on a Saturday to come and share their knowledge and experience with the group.

Please be on the look out for the next session in our series that will focus on Responsible Stewardship addressing the topics of proxy voting and active engagement.

View the presentation slides here.