Reports reveal an ongoing focus on promoting health and wellbeing amid pandemic recovery, as well as an increasing focus on sustainable cities in the fight to address climate change.
BMO Global Asset Management has today released its annual ESG Profile and Impact Reports for the BMO Global Responsible Equity and BMO Responsible Global Emerging Markets Equity strategies. Never more so than now have healthcare challenges been so apparent, and in this year’s reports BMO GAM provides further insights into investments addressing the rising demand and alleviating supply challenges of healthcare globally.
Across both Strategies, BMO GAM uses the UN Sustainable Development Goals (SDGs) as a framework to map impact, analysing how the sources of revenue for each investee company correspond to the 169 targets that underlie the UN SDGs.
While the Strategies seek to address the SDGs across the board, the analysis highlights an ongoing focus on SDG 3 – Good Health and Wellbeing, as well as investments supporting SDG 11 – Sustainable Cities and Communities, as the portfolios seek to support a long-term, sustainable recovery in the post-pandemic world.
Investing to support Sustainable Cities and Healthcare
SDG 3 has a significant weight in both Strategies, with holdings in several healthcare and pharmaceutical companies supporting the advancement of health and wellbeing, including goal 3.8 which sets an ambition of affordable healthcare for all. Holdings in the Responsible Global Equity Strategy include Thermo Fisher Scientific Inc., who provide essential diagnostics and treatment equipment, and CVS Health, which provides access to healthcare through its retail pharmacy stores and clinics.
Climate change is an ever-present challenge, and features across SDGs 6, 7, 11 and 13. Taking SDG 11 as an example, holdings in the Responsible Global Equity Strategy include Autodesk and Schneider Electric addressing sustainability within real estate, a sector which from construction to use contributes around 30% of global greenhouse gas emissions. Meanwhile the Responsible Global Emerging Markets Equity Strategy includes holdings such as China Resources Gas, which plays an important role in the energy transition in China, with a far lower environmental and social impact than coal, which remains China’s largest source of energy generation.
Alice Evans, Managing Director, Co-Head of Responsible Investment at BMO GAM (pictured), comments:
“The events of the last year have accelerated a broader understanding of just how unsustainable many aspects of modern life had become across developed and emerging markets – from the under investment in public health and disease prevention systems, to the growing social inequalities that the past few decades of economic growth have papered over. We believe there is a clear role to play for private capital in addressing such inconsistencies, through the responsible allocation of capital to those companies addressing or providing solutions that support the SDGs. We will continue to use the SDGs as a framework to ensure we are playing our part in the responsible allocation of capital to meet those goals.”
The reports outline the full scope of impact achieved through each strategy, with highlights
BMO Global Responsible Equity Strategy
In 2020, BMO GAM engaged with 33 companies in the Responsible Global Equity strategy, representing 65% of the strategy by value, with the aim of improving their management of ESG issues.
The Strategy saw 21 milestones achieved – instances of positive change following engagement – ranging across all environmental, social and governance (ESG) pillars. BMO GAM noted significant improvements in disclosure and reporting on ESG and climate change at many of the companies held. BMO GAM also called on companies to align their business strategies with the transition to net-zero global emissions by 2050.