About Us

Responsible Investing

Our Responsible Investing Philosophy

As a value manager, Beutel Goodman’s primary objective is to deliver superior risk-adjusted portfolio performance to our clients over the long term. We pursue this through the ownership of debt and equity positions in high-quality companies. Companies with strong environmental, social and governance practices often share many of the sound fundamentals that are attractive to our value-investing approach. ESG factors have the potential to materially affect the long-term sustainability of a business and are thus an important part of our analytical process.


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Our Process

Our rigorous research methodology encompasses a fundamentally driven analysis to identify valuation opportunities in quality companies from a bottom-up perspective. We consider ESG criteria to be part of the material risks associated with the long-term sustainability of investments. Using a bottom-up, disciplined, value-investing approach, each equity and credit research report or update we prepare incorporates ESG considerations. ESG information is gathered from internal research, third-party ESG data providers and meetings with company management.

Our Responsibilities

Responsible investment research responsibilities are shared among the entire investment team. All portfolio managers are charged with the responsibility of considering material risks to the investments they recommend, including ESG risks.

ESG policy oversight and review responsibilities lie with the firm's Management Committee.

Proxy Voting and Engagement

Part of our highly disciplined investment research process involves meeting with company management, which can provide important insights into issuers and ESG factors, and how these may impact long-term shareholder value. We believe that we can effect change on ESG issues by engaging with management as owners of a company's stock or bonds. Where relevant, we will strive to promote positive change if our analysis indicates a company falls short on stated policies or where material, unaddressed ESG issues exist or ESG disclosure is inadequate. We support efforts by companies to create strong governance policies and to develop a clear strategic vision to enhance value to shareholders.

We have long advocated for sound corporate governance, which we believe is the foundation of the responsible management of a company's environmental and social practices. As part of our portfolio management responsibilities, we review each proxy item for our holdings before casting votes. We assess all motions, including those relating to ESG practices, based on their consistency with long-term shareholder value creation.

Proxy voting is not as prevalent in fixed income, and typically only occurs when a company is seeking to change its trust indentures. The fixed income team actively engages with company management on ESG issues that we deem will affect the sustainability of the company’s cash flows - and ultimately, the company’s ability to repay its debt - or will otherwise adversely affect the value of the bond.

Collaboration and Industry Participation

Beutel Goodman is a member of collaborative initiatives and regularly participates in industry forums on ESG and responsible investing. Beutel Goodman became a signatory of the UN-sponsored PRI in 2019, formalizing our commitment to the PRI’s key tenets. We recognize the importance of achieving the goals of the Paris Agreement and support the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD).

Sustainability-Related Disclosures

Beutel, Goodman & Company Ltd. (“Beutel Goodman”) is required to comply with certain requirements set out under the EU Sustainable Finance Disclosure Regulation (“SFDR”) as Sub-Adviser to the BA Beutel Goodman US Value Fund. The information included below outlines Beutel Goodman’s compliance with the applicable requirements under SFDR for this Fund.

Sustainability Risk Policy (Article 3)

EU SUSTAINABLE FINANCE DISCLOSURE REGULATION

The Sustainable Finance Disclosure Regulation (“SFDR” or the “Regulation”) applied from 10 March 2021 (the “Application Date”). The Regulation requires financial advisers such as Beutel Goodman (the “firm”) to provide information to investors with regards to the integration of sustainability risks, the consideration of adverse sustainability impacts, the promotion of environmental or social characteristics, and sustainable investment.

This Sustainability Risk Policy specifically addresses the obligation in Article 3(2) of the Regulation:

“Financial advisers shall publish on their websites information about their policies on the integration of sustainability risks in their investment advice or insurance advice.”

More information related to the firm’s responsibilities under the SFDR, and the firm’s approach to ESG (Environmental, Social, and Governance factors) and responsible investment in general, can be found on the firm’s website at https://www.beutelgoodman.com/about-us/responsible-investing/.

SUSTAINABILITY RISKS

A “Sustainability Risk” is defined in Article 2 (22) of the Regulation: “an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment”.

Sustainability Risks include (but are not limited to) the following:

  • Environmental risks such as the impact of environmental events on operations of portfolio companies;
  • Social risks such as impact of non-compliance with anti-slavery or working conditions laws and regulations by portfolio companies; and
  • Governance risks such as inadequate management oversight of portfolio companies.

INTEGRATION OF SUSTAINABILITY RISKS IN INVESTMENT PROCESSES

ESG integration is applied across the firm’s equity and fixed income holdings. The firm operates a fundamental, bottom-up, value-investment philosophy that focuses on capital preservation, absolute risk reduction and downside protection. Companies with strong ESG practices often share the fundamental qualities that are attractive to the firm’s investment philosophy. In contrast to investment philosophies that emphasize timing trades to capture the movements of valuations in securities, value investing depends upon a fundamental assessment of the intrinsic worth of a company. The need for accurate assessment of material risks, including sustainability risks, and the suitability of a portfolio company’s management practices to meeting those challenges is not just another step in the firm’s investment process, it is a core tenet embodied in every valuation the firm performs on an asset over the investment lifecycle.

In recognition of the importance of responsible investment, the firm integrates the United Nations- supported Principles for Responsible Investment (“PRI”) and ESG factors throughout the investment appraisal, due diligence, decision making and post investment monitoring process.

Beutel Goodman seeks companies with sound governance and strives to avoid businesses with material environmental and social controversies. However, the firm may consider investment into a business with poor performance on one or more environmental or social criteria if Beutel Goodman can ascertain a substantial opportunity for improvement, and a credible pathway for meeting the desired standards within a reasonable period of time post-investment.

INVESTMENT MONITORING

After an investment has been made, Beutel Goodman actively monitors its underlying investment portfolio holdings with respect to ESG issues and opportunities, including Sustainability Risks. The firm gathers ESG information from internal research, third-party ESG data providers, and meetings with company management. Beutel Goodman also monitors a security issuer’s current and historical performance on material ESG factors, and its performance compared to peer companies, to identify trends that may impact future financial performance. The firm also considers the implications of applicable material long-term and systemic factors, such as demographic change, resource scarcity, developments in technology and climate change.

INVESTOR REPORTING

Beutel Goodman reports engagement activities related to ESG matters to investors on a quarterly basis, and produces an annual report summarizing those activities that is available on the firm’s website at https://www.beutelgoodman.com/about-us/responsible-investing/.

IMPACTS OF SUSTAINABILITY RISKS

Throughout the processes outlined above Beutel Goodman takes a robust and proactive approach to integrate Sustainability Risks into its investment decisions. These are not limited to initial screening or due diligence; the firm monitors and reports on investments throughout the investment cycle and commits to reporting on such activities to investors as outlined above.

Through the integration of the processes outlined above, Beutel Goodman believes that likely impacts of Sustainability Risks on the returns of any given product are low. However, the risk disclosure section of the relevant pre-contractual disclosures of each product will provide a more bespoke risk rating as is suitable for that product and its activities.

REVIEW OF THE POLICY

The Management Committee of Beutel Goodman has approved this policy statement. This Sustainability Risk Policy (Version 1) is effective as of April 1, 2022.

This policy statement will be reviewed annually by the Management Committee.

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Principal Adverse Sustainability Impacts Statement (Article 4)

EU SUSTAINABLE FINANCE DISCLOSURE REGULATION

The Sustainable Finance Disclosure Regulation (“SFDR” or the “Regulation”) applied from 10 March 2021. The Regulation requires financial advisers such as Beutel Goodman (the “firm”) to provide information to investors with regards to the integration of sustainability risks, the consideration of adverse sustainability impacts, the promotion of environmental or social characteristics, and sustainable investment.

The firm considers principal adverse impacts of its investment advice on sustainability factors in relation to specific products. Therefore, this Principal Adverse Sustainability Impacts Statement specifically addresses the obligation in Article 4(5)(a) of the Regulation:

“Financial advisers shall publish and maintain on their websites:

(a) information as to whether, taking due account of their size, the nature and scale of their activities and the types of financial products they advise on, they consider in their investment advice or insurance advice the principal adverse impacts on sustainability factors”

Beutel Goodman notes that pursuant to the Regulation, the EBA, EIOPA and ESMA (the “ESAs”) are mandated to develop regulatory technical standards (the “RTS”) with respect to climate and other environment-related adverse impacts, and with respect to social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

Beutel Goodman notes further that as of the date of this Policy, the ESAs have published a final draft of the RTS, but the RTS remain subject to adoption by the European Commission. Notwithstanding this, where adverse impacts are considered in respect of one of the products the firm advises on, the firm will apply the standards as set out in the draft RTS as of the date of this Policy and will take ongoing advice to monitor and update its policies where necessary due to any change in the RTS upon adoption by the European Commission.

Beutel Goodman will also monitor the development and adoption of any further RTS and consider, where appropriate on a product-by-product basis, the adoption of those standards to be set out in such RTS.

More information related to the firm’s responsibilities under the SFDR, and the firm’s approach to ESG (Environmental, Social, and Governance factors) and responsible investment in general, can be found on the firm’s website at https://www.beutelgoodman.com/about-us/responsible-investing/.

SUSTAINABILITY FACTORS

Beutel Goodman uses the definition of principal adverse sustainability impacts as described in Recital 20 of the Regulation: “Those impacts of investment decisions that result in negative effects on sustainability factors.”

“Sustainability factors” are defined in Article 2(24) of the Regulation as: “environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters”.

ADVERSE SUSTAINABILITY IMPACTS STATEMENT

Beutel Goodman has published here, in accordance with its obligations under Article 10 of the RTS, an adverse sustainability impacts statement in the format prescribed by the RTS.

Beutel Goodman notes that the European Commission, in its 25 November 2021 letter to the European Parliament and European Council, has indicated that the reporting of adverse sustainability impacts should be completed by 30 June 2023 with respect to the first full “reference period” under the RTS, such period being 1 January 2022 to 31 December 2022.

Beutel Goodman notes that the ESAs, in a joint supervisory statement dated 25 February 2021 (the “Joint Statement”), propose that a short form adverse sustainability impacts statement, using the draft RTS “as a reference for applying the provisions of Articles 2a, 4, 8, 9, and 10 of the SFDR” should be made until the first reference period. Beutel Goodman has therefore adopted an adverse sustainability impacts statement in the format proposed by the Joint Statement.

INFORMATION REFERRED TO IN SFDR ARTICLE 4(5)(A)

Beutel Goodman considers the principal adverse impacts of its investment advice on sustainability factors in a manner appropriate to its size and the nature and scale of its activities, and the types of financial product it is advising on. Depending on the characteristics of the product on which it is advising, and in particular the product’s designation as promoting “environmental or social characteristics” (SFDR Article 8) or having “sustainable investment” as its objective (SFDR Article 9), the firm will determine and disclose whether, and the extent to which, it considers the principal adverse impacts of its investment advice.

In relation to products that do not expressly claim to promote environmental or social characteristics or have a sustainable investment objective, Beutel Goodman does not consider the principal adverse impacts of its investment advice.

In relation to products that promote environmental or social characteristics, or have sustainable investment as their objective, the firm considers principal adverse impacts to the extent described in that product’s pre-contractual documents.

In all cases, please refer to a product’s pre-contractual information for the specific policies applicable to that product.

USE OF PUBLISHED SFDR INFORMATION

The firm uses the information referred to in the Regulation published by financial market participants, along with information from other sources, to inform its investment advice, to engage with investment assets, and to produce the reporting required by the Regulation. Specifically, to the extent that principal adverse impact and taxonomy alignment information relevant to current or potential investment targets is published by financial market participants, the firm uses that information:

  • to inform the assessment of the philosophies and objectives of the management team of the target asset;
  • to identify the most productive avenues for engaging in active ownership; and
  • relying on the accuracy of that information as it is permitted to do under the Regulation, to prepare its own required reporting under the Regulation.

RANKING AND SELECTION METHODOLOGY

The firm’s investment advice, in relation to a given asset, is based on its assessment of the value of the asset relative to the current market price for that asset. Information about the principal adverse impacts of that asset’s direct and indirect economic activities feeds into the valuation assessment, in line with the firm’s Responsible Investment Policy. More information about how the firm considers strong ESG policies aligned with value-promoting management practices are available in the firm’s Responsible Investment Policy.

The firm does not directly rank or select financial products on the indicators used in Table 1 of Annex I of the Regulatory Technical Standards. The firm considers that these indicators, in isolation, are not adequate to produce a useful assessment of a potential investment asset’s intrinsic value relative to its market price.

CRITERIA OR THRESHOLDS FOR SELECTION OF FINANCIAL PRODUCTS

The firm does not directly operate any principal adverse impact criteria or thresholds in selecting financial products or advising for or against investment in those products.

REVIEW OF THE POLICY

The Management Committee of Beutel Goodman has approved this policy statement. This Principal Adverse Sustainability Impacts Statement (Version 1) is effective as of April 1, 2022.

This policy statement will be reviewed annually by the Management Committee.

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