Individuals increasingly want to make a positive impact. As consumers, there is a growing recognition that we can align our investment decisions with our values. Ultimately, we want our money to drive improvement in the world around us.
This is exactly what our BMO SDG Engagement Global Equity Fund is designed to achieve.
Risk Disclaimer
The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.
We must strongly accelerate our broader efforts to achieve the Sustainable Development Goals…and we need increased financing for those solutions.
UN Secretary-General António Guterres, 2019
The Sustainable Development Goals (SDG) were developed in 2015 by the United Nations (UN) and cross-industry stakeholders with a view to providing a roadmap towards a more sustainable world by 2030. The SDGs are 17 ambitious, high-level goals with 169 specific targets, that were endorsed by all UN member states.
Achieving these targets typically requires a global perspective together with commitment and coordinated action from international organisations, governments, companies and individuals. We all have a role to play and the SDGs were designed with that in mind.
For example, the UN has estimated that achieving the SDGs will require investment of between US$5-7 trillion each year until 2030. To achieve this, private capital must fund around 85% annually.1
1 United Nations Conference on Trade and Development (UNCTAD), 2014. World Investment Report; Investing in the SDGs, An Action Plan
The bar we set when investing is high.
Containing 40-60 carefully selected small and mid-sized companies, the BMO SDG Engagement Global Equity Fund has a remit to seek investment opportunities right across the world.
Alongside strict criteria around the quality and value of a company, there must be clear opportunity for SDG-linked engagement. We aim to invest for the long term, with low portfolio turnover, facilitating stronger relationships with companies which enhances the effectiveness of our dialogue.
Image: © QIAGEN, all rights reserved.
We seek to drive targeted improvement, focusing on how companies address ESG risks, opportunities and impacts. Constructive and informed engagement with companies is a critical component of our approach. For over 20 years, BMO has been an active owner, which plays a major role in allowing us to be better stewards of our clients’ assets.
Engagement is structured around the SDGs and their underlying targets. To engage effectively we strive to understand the company’s corporate strategy, culture and the materiality of ESG factors.
We believe that the best way to achieve our engagement goals is by constructive dialogue with key decision makers on the most relevant ESG issues to each company, in order to drive improvement. Close collaboration between the Global Equities and Responsible Investment teams is at the heart of successful engagement.
We have also developed an online engagement database for over 12,500 companies, allowing us to log interactions, progress and results, which we can do at an SDG target level.
Underlying targets identified by the UN
Targets selected by the BMO Responsible
Investment team, where there is opportunity
for us to drive change
By investing in companies and using the Sustainable Development Goals as an engagement framework, we believe we can contribute to building a more sustainable world.
For each company in the BMO SDG Engagement Global Equity Fund portfolio, we monitor and measure the impact of our dialogue around pre-defined SDG targets. We want to see improvement and continually assess the progress each company is making.
The focus of our engagement varies from company to company depending on the products and services they provide, and how they conduct their business. We log activity and progress on our engagement database. Over time we will assess and report on the progress companies are making.
We exist to convene, catalyse and empower change that sustains growth for good.
Darryl White, Chief Executive Officer, BMO Financial Group – World Economic Forum, 2019
Engagement
Outcomes
company engagements
countries
of engagement linked to
environmental issues
of engagement linked to
social issues
The BMO SDG Engagement Global Equity Fund aims to provide capital growth by investing in a well-diversified selection of global small and mid-sized companies. The fund seeks to achieve a positive impact through targeted, impact-focused, active engagement with companies, using the SDG framework.
At a glance
Typical geographic and sector allocations
Source: BMO Global Asset Management, 31-Dec-18, for illustrative purposes only.
Investments in smaller companies carry a higher degree of risk as their shares may be less liquid and investment values can be volatile.
