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May 08, 2009
TD Asset Management Announces Sustainable Investing Policy for all Operations
    by Robert Kropp

Investment firm will incorporate ESG criteria across all investment mandates, and launches Global Sustainability Fund that includes corporate sustainability leaders.


In 2008, TD Asset Management, an investment management firm with over $134 billion in assets under management, became a signatory of the Principles for Responsible Investment (PRI), a program of the United Nations that provides a framework for the incorporation of environmental, social and corporate governance (ESG) issues into investment analysis.

In 2009, TD Asset Management's parent company, the Toronto-Dominion Bank, was named to the Global 100 Most Sustainable Corporations in the World. The Global 100 companies are recognized as having displayed the ability to identify and effectively manage material environmental, social and governance (ESG) factors in their approaches to corporate risks and opportunities.

In keeping with its commitment to PRI, TD Asset Management recently issued a Sustainable Investing Policy, which extends the firm's global sustainability strategy to include all of its investment mandates, where to do so is consistent with its mandate and
otherwise permitted. The policy covers investment decisions made regarding public equity securities and corporate fixed-income securities, and extends to both its Canadian and US operations. TD Asset Management operates in the US as TDAM USA.

According to the policy, "Sustainable investing means helping our clients who have a shorter time horizon achieve their financial objective in a way that does not compromise our ability to help clients who have a longer time horizon achieve their financial objective too." The incorporation of ESG factors into investment decision-making will be the same for both sets of clients.

In order to ensure that its investment analysis includes ESG factors, TD Asset Management intends to develop a sustainability matrix that utilizes both internal and external sources of ESG data. The firm's decision-making process will include close attention to risk management, ensuring proper disclosure, and active ownership. The firm's active ownership policy includes engagement, proxy voting, and if necessary, litigation.

Divestment, according to TD Asset Management, "Is not an option for mandates where we are required to hold all of the securities in an index. It is an option of last resort for other mandates."

TD Asset Management has established internal committees on active ownership and environmental matters to ensure that its Sustainable Investing Policy is implemented in its decision-making.

In advance of its announcement of its Sustainable Investing Policy, TD Asset Management launched the TDAM Global Sustainability Mutual Fund for institutional investors. The Fund includes "Companies recognized for their leading approach to building sustainable businesses, as well as companies that are developing interesting solutions for today’s pressing environmental problems," according to Robin Lacey, Managing Director.

The Fund selects companies from the Dow Jones Sustainability World Index (DJSI World). The DJSI World Index tracks the performance of global sustainability leaders, and measures general as well as industry-specific sustainability criteria. The index consists of approximately the top 10% of companies in terms of sustainability, according to TD Asset Management.

A portion of the Fund's portfolio will be comprised of emerging specialists in environmental technology. According to TD Asset Management, the emerging environmental specialist portion of the Fund will include companies whose innovative approaches to pressing environmental problems are either their core business or a significant and growing part of their business. The major themes of this part of the portfolio include clean water, resource efficiency and alternative energy.

 

 
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