Customers
TDAM participates in collaborative engage- ments with other investors, including the Carbon Disclosure Project (CDP), the CDP Water Program, the CDP Forests Program, Carbon Action and the Canadian Coalition for Good Governance.
TDAM maintains a proprietary ESG matrix that scores companies on ESG factors to be incorporated in new investment research reports.
CHALLENGE
In 2013, TDAM decided to close the TD Global Sustainability Fund.
RESPONSE
This was partly due to a lack of investor demand, but mostly because our preferred approach is to integrate ESG considerations as part of mainstream equity and corporate fixed-income processes. We believe this to be a more progressive approach that aligns with TD’s goal to be an environmental leader.
Workplace 2013 Performance
TDAM engaged with companies across a broad range of industries, including oil and gas exploration and production, oil and gas drilling and fracturing, mining, consumer staples, consumer discretionary, railroads, pipelines, utilities and telecommunications. The topics discussed included:
• The use, disposal and treatment of water in oil and gas extraction and mining;
• The management of greenhouse gas emissions in oil and gas extraction and railroads;
• The leaking of potentially hazardous materials at the site of extraction during oil and gas extraction;
• Pipeline safety and integrity issues; • Safety procedures for railroads;
• Disclosure of environmental targets in the auto sector;
• Community relations in extractive industries, including discussions with Canadian Aboriginal groups;
• Executive remuneration in the gold mining sector;
• Dual class share structure and director independence;
• Upstream supply chain safety standards in developing countries; and
• Anti-bribery efforts in the construction sector.
Environment
Communities
Since 2008 TDAM has supported over 300 environmental and social proposals, including 107 proposals in 2013 on the following topics:
Environmental Proposals
Proposal subjects included the nomination of Directors with environmental expertise, environmental risk-reduction efforts, spill mitigation efforts, water use, hydraulic fracturing, greenhouse gas emissions, effects of climate change, energy efficiency and overall sustainability reporting.
United Nations Principles for Responsible Investment (PRI)
The PRI launched their new Reporting Framework (“the new Framework”) on September 30, 2013, and the first round of reporting under the new Framework is due on March 31, 2014. The new Framework is divided into specialist asset class modules with each module containing quantitative information and qualitative descriptions. The new Framework will be used by signatories for reporting publicly on their progress in implementing the principles. As part of preparing for the new Framework, TDAM participated in last year’s pilot reporting exercise and provided feedback to the PRI.
Pipeline safety was a key area of focus for TDAM in 2013. TDAM wrote to TransCanada and Enbridge, Canada’s two largest pipeline companies. TDAM asked about a wide range of environmental issues, including pipeline degradation, safety features of new and altered pipelines, and risks to groundwater. The companies gave extensive responses on how they managed and mitigated their environmental issues. TDAM will continue to pay attention to these issues.
How We Operate FS3
Issue in Focus: Engaging With Pipeline Companies
68 FS4
Plans for 2014
TDAM plans to improve the research performed by sector analysts by utilizing more information from both the ESG matrix results and the proxy voting results. This integration of data will create a more enhanced analysis of investment risk, consistent with TDAM’s approach to ESG factors.
+ Sustainable Investing Policy (PDF) + 2012 Engagement Report (PDF) + Disclosure on Proxy Practices
TD 2013 Corporate Responsibility Report
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