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Impact Reports

Impact Reports

Investing with impact in mind

This decade is vital for achieving the ambition of the UN Sustainable Development Goals (SDGs), and ultimately creating a better future for us all. Investors have a key role to play – it’s not enough to say we intend to support sustainable development, we need to monitor and measure the impact our investments have. That means working with our investee companies to encourage better disclosure of impact metrics.

We publish impact reports annually for our growing range of sustainability strategies, using the SDGs as a key reference point to measure the impact of our investment decisions. Each report can be found below.

Measuring impact

The United Nations Sustainable Development Goals (SDGs) are a key reference point for measuring impact. There are 17 goals and 169 associated targets, providing a useful tool for companies and investors to be able to contribute to achieving a more sustainable future by 2030. The framework has created a common language between stakeholders.

BMO’s contribution to SDGs in 2019

As pioneers in responsible investment, at BMO, we use the SDGs as a framework for engaging for positive change. Hover over the wheel below to discover how our engagement with companies in 2019 linked to the different goals and targets.

In 2019, 72% of our engagement was linked to SDGs. We positively contributed to 10 of the 17 SDGs.

72%

of engagement linked to SDGs

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End poverty in all it's forms everywhere
The way we shop has changed radically over the past decade. The growth of low-cost online retailers has put unprecedented pressure on the margins of high street stores. Many have had to respond by cutting costs to stay in business, which can mean squeezing the wages of workers and of those in their supply chains. We engage with our investors on these key issues.
Read: ESG Viewpoint: Living wage in the retail sector
We encourage companies – particularly those in high-risk sectors – to identify and manage modern slavery risks. We believe that companies that take robust action to tackle modern slavery are more resilient over the long-term, and are less likely to suffer financial and reputational damage.
Read: ESG Viewpoint: Modern slavery – engagement update
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Ensure healthy lives and promote well-being for all at all ages
Antimicrobial resistance is a natural phenomenon being accelerated due to poor stewardship of antibiotics in healthcare and farming. We engaged pharmaceutical companies, food producers and food retailers on their approach to AMR issues. We will continue to benchmark best practices and encourage more robust commitments on addressing AMR.
Listen: AMR in the Pharmaceutical and food industry
India’s vast untapped market for healthcare and financial services offers significant growth prospects for companies looking to serve it. We believe that beyond reaping the financial benefits of increasing revenues, companies can and should play an active role in improving people’s livelihoods by making these services affordable and inclusive.
Read: ESG Viewpoint: Access for Growth in India
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Achieve gender equality and empower all women and girls
Workforce disclosure is essential for investors to better analyse companies’ social performance. Companies’ workforce disclosure is still limited, often referencing data gaps or lack of appropriate data gathering systems. BMO Global Asset Management encourages companies to respond to the Workforce Disclosure Initiative (WDI) annual survey to underline accountability to their social commitments.
Read: ESG Viewpoint: The quest for workforce disclosure
We engaged Germany’s largest listed companies on the lack of female representation at senior leadership levels. Find out the results and responses from those companies.
Read: Gender diversity – are German companies keeping up?
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Ensure availability and sustainable management of water and sanitation for all
A healthy marine environment is critical to the health of the planet and its inhabitants. Currently only 2-6% of our oceans are classified as Marine Protected Areas (MPAs), and it is estimated that we need 30% protected to ensure a thriving ocean ecosystem. In addition to the social and environmental benefits, around $2.5tn of economic value is generated annually by the oceans. Read more about how our Responsible Investment team engage with companies on these issues.
Read: Focus on ocean health
Water-related issues can materially impact businesses; the problem is complex and solutions local. A systematic approach is required by exposed companies, and we encourage best practice.
Read: Water program
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Ensure access to affordable, reliable, sustainable and modern energy for all
BMO GAM itself has committed to an ambition of net zero emissions in our investments by 2050, as part of the Net Zero Asset Managers Initiative. As part of our stewardship approach, we have been working with other investors to urge companies to align with these goals. However, dialogue alone is not enough, particularly where companies are not meeting even basic expectations or are resistant to engagement.
Read: ESG Viewpoint – Voting for climate action
With less than 12 months until the critical COP26 climate negotiations, momentum is building towards the ambition to limit the global temperature rise to no more than 1.5°C. Achieving this means aiming for net zero global greenhouse gas emissions by 2050, and a 50% cut in emissions between now and 2030.
Read: ESG Viewpoint – Voting for climate action
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Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
COVID-19 is transforming many aspects of our lives. Notably, it’s accelerating our reliance on technology. This journey further into the digital world will certainly bring great benefits and opportunities – but not without significant risks.
Read: The COVID-19 effect: Cybersecurity and data privacy
Promote development-oriented policies (SDG 8.3)
We engage around social issues consistently to ensure the application of labour management policies that provide a diverse, non-discriminatory and safe workplace, where workers are treated well and paid fairly. We encourage transparency and accountability within supply chains and direct operations to ensure best practice.
Read: ESG Viewpoint – Racial justice: the imperative for investor action
Our engagement in 2018 focused on companies required to publish modern slavery statements in line with the UK’s landmark Modern Slavery Act 2015. Since the introduction of this Act, modern slavery legislation has progressed in a number of countries, including Australia, Canada, France, and the Netherlands.
Read: Modern Slavery: Engagement Update
Protect and promote safe working environments for all workers (SDG 8.8)
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Ensure sustainable consumption and production patterns
We engage with companies on the circular economy, the use of innovative materials, adopting product lifecycle assessments, improving recycling along the entire supply chain, and educating consumers on product use and disposal.
Read: Is the circular economy treading water?
In April 2018, the EU Member States endorsed the EU Commission’s proposals to ban all outdoor uses of three neonicotinoids (“neonics”). Since then, we have reviewed our engagement on chemical safety and biodiversity risk with ten agrochemical companies to see how they are responding to the new rules.
Read: ESG Viewpoint: Chemicals and biodiversity
2018 saw a significant focus on the issue of ocean plastics, spurred by the airing of Sir David Attenborough’s seminal documentary Blue Planet II and the awareness that more than 8mn tonnes of plastic reaches the oceans annually.
Read: Ocean plastics and the impact on the environment
The Sustainable Development Goals (SDGs) set out a roadmap for a more sustainable global economy and society by 2030. Developed by the United Nations, they were endorsed in 2015 by all 193 member states. They build on the Millennium Development Goals (MDGs), but are broader in scope, and have a critical difference – whilst the MDGs focused on government actions, the SDGs look to all stakeholders, including the financial sector and business, to support implementation.
Read: Advancing SDGs through engagement
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Take urgent action to combat climate change and its impacts
Indonesia is one of the world’s biggest emitters of greenhouse gases, driven by deforestation and land-use change. With palm oil, rubber, sugar and coal being vital to the country’s economic growth and trade balance, calls to address the climate impacts of their production and use face significant hurdles. Meanwhile, the intense monsoons and rain of January 2020, which left tens of thousands of people displaced, were a stark reminder of the country’s vulnerability to climate risks.
Read: ESG Viewpoint: Are Indonesian companies waking up to climate risk?
With a growing number of governments setting paths to net zero emissions, the future of coal is in question. It’s estimated that coal use would have to drop by 60% by 2030 to achieve a net zero future. Through our engagement, we seek to encourage companies with exposure to coal to be proactive in how they will manage the transition and avoid the risks of stranded assets.
Read: coal's uncertain future
BMO GAM itself has committed to an ambition of net zero emissions in our investments by 2050, as part of the Net Zero Asset Managers Initiative. As part of our stewardship approach, we have been working with other investors to urge companies to align with these goals. However, dialogue alone is not enough, particularly where companies are not meeting even basic expectations or are resistant to engagement.
Read: ESG Viewpoint – Voting for climate action
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Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
Palm oil production has serious social and environmental impacts. We consider how the Roundtable on Sustainable Palm Oil is addressing these issues.
Read: Can palm oil ever be sustainable?
A healthy marine environment is critical to the health of the planet and its inhabitants. Currently only 2-6% of our oceans are classified as Marine Protected Areas (MPAs), and it is estimated that we need 30% protected to ensure a thriving ocean ecosystem. In addition to the social and environmental benefits, around $2.5tn of economic value is generated annually by the oceans. Read more about how our Responsible Investment team engage with companies on these issues.
Read: Focus on ocean health
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Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
Reduce all forms of violence-related death rates (SDG 16.1)
With the rapidly-developing situation, we are still in the early stages of understanding the impact that COVID-19 will have. However, some important implications for corporate governance practices and standards are already emerging.
Read: Corporate governance implications of the COVID-19 pandemic
Develop effective, accountable and transparent institutions (SDG 16.6)
Improving communications between an investee company and its stakeholders; bridging the gap between audits and investor expectations; protects shareholder rights in the face of ever-increasing protectionism.
Read: ESG Viewpoint - International Corporate Governance Network
Other = SDGs less than 2%. SDG targets within the denoted goal that are less than 0.3%
28% of our engagement does not have a direct link to a specific SDG target. The majority of these engagement activities are on corporate governance, which we view as an essential building block in creating more sustainable, better run companies. The main exception is our engagement on board diversity, much of which has covered gender diversity issues, which we see as supportive of SDG 5 and targets 5.1 and 5.5 in particular, but has a wider application to the achievement of other goals such as SDG 8 and SDG 10.

Read our Responsible Investment 2019 Review

VIEW REPORT

Access our Impact Reports

Read our impact reports for more information on how each fund has contributed to positively engaging with companies on a global scale.

Each impact report includes:

  • Analysis of how the products and services provided by companies we invest in for this portfolio align with the SDGs
  • Key portfolio impact metrics on carbon, water and gender
  • Summary of our engagement with portfolio companies, and how this aligns with the SDGs

Sustainable Universal MAP Range

In 2020, we engaged with 107 companies held in the funds resulting in 59 milestones. Key topics included engagement on labour standards, corporate governance and climate change.

  • Across the Sustainable MAP range, the top SDGs we aligned to were:
    • SDG 8 – Decent Work and Economic Growth. In particular, target 8.2 which focuses on boosting economic productivity through technological upgrading and innovation and; target 8.10 which aims for universal access to financial services
    • SDG 3 – Good Health and Well-being. Of the activity across the range which linked to SDG 3, the majority aligned with target 3.8 which calls for universal access to medicines and health-care
  • Engaged with a number of companies held in the funds including Smurfit Kappa and National Grid linking to SDG 13 – Climate Action. Worked with GlaxoSmithKline on its approach to executive remuneration
  • We voted at 90 meetings
VIEW REPORT

BMO Responsible Global Equity Fund

In 2019, we engaged with 76% of the companies held in the strategy, with the aim of improving their management of ESG issues.

  • For the first time, we have identified and outlined some of our companies’ negative contributions to the SDGs (those products or services that companies in our Strategy offer which might hinder the achievement of some of the SDGs):
    • 77% positive contribution
    • 3% negative
    • 19% neutral
  • Top engagement aligned to: SDG3 – Good Health and Well-being, and SDG8 – Decent Work and Economic Growth
  • Investment in technology and industrial companies, providing sustainability solutions, align with Target 8.2, which calls for technological innovation to support increased productivity and economic growth
  • We voted at 54 meetings
VIEW REPORT

BMO SDG Engagement Global Equity Fund

In 2019, we engaged with 96% of companies within our fund’s portfolio across 18 countries, totalling 151 engagements.

  • Top engagement aligned to: SDG 12 20% of total engagement, SDG 8 19% and SDG 6 & 3 contributed 10%
  • SDG 12 – we have been talking to companies about improving environmental and social management, and utilising resources in the most efficient of ways. Waste management and packaging innovation comes in here
  • SDG 8 – focused on ensuring the application of labour management policies that provide a diverse, non-discriminatory and safe workplace, where workers are treated well
VIEW REPORT

BMO Sustainable Opportunities Global Equity Fund

In 2019 we engaged with 32 companies held in the fund, with the aim of improving their management of environmental, social and governance issues.

  • 88% of activities aligned to the Sustainable Development Goals (SDGs)
    • Our most frequent topics for engagement were labour standards (supporting SDG 8 – Decent Work and Economic Growth), where we focused particularly on workforce diversity and on modern slavery; and corporate governance, including remuneration and board effectiveness
    • We engaged with a number of portfolio companies including TSMC, Kerry Group and Smurfit Kappa Group on their water management strategies, particularly as climate change is likely to intensify these risks over time. This links to SDG 6 – Clean Water and Sanitation
  • We voted at 47 meetings
VIEW REPORT

BMO Responsible Global Emerging Markets Equity Fund

In 2019, we engaged with 90% of the companies held in the strategy, with the aim of improving their management of ESG issues.

  • 51.5% positive contribution towards SDGs and only 11% negative, with the remaining 31.5% on neutral
  • Corporate governance was a focus – covering board composition and effectiveness, climate change – including emissions management and resilience, and adaptation
  • Engagement on climate and other environmental topics mainly addressed SDGs 12, 13 and 15
  • Social engagement focused on SDGs 8 and 9 – more specifically on issues related to financial inclusion, working conditions and business conduct
  • We engaged on public health issues linked to access to healthcare, covering SDG 3
  • We voted at 55 meetings 
VIEW REPORT

BMO Responsible UK Equity Fund

In 2019 we engaged with 52 companies held in the fund, with the aim of improving their management of environmental, social and governance issues.

  • 66% of activities aligned to the Sustainable Development Goals (SDGs)
  • Top SDG’s we aligned to:
    • SDG 3 – Good Health and Well-being 
      Examples of companies linked to SDG3 include Clinigen, which facilitates access to new medicines across over 100 countries worldwide, and Halma, whose technological solutions include a range of healthcare products in diagnostics and opthamology.
    • SDG 9 – Industry, Innovation and Infrastructure
      Companies providing innovative solutions aligned with SDG 9 include Johnson Matthey, which provides technologies that reduce air pollution
  • We voted at 82 meetings
VIEW REPORT

BMO Responsible UK Income Fund

In 2019 we engaged with 52 companies held in the fund, with the aim of improving their management of environmental, social and governance issues.

  • 66% of our activity aligned to the Sustainable Development Goals (SDGs)
  • The top 3 SDG’s we aligned to made up 40% of engagement, they were:
    • SDG 9 – Industry, Innovation and Infrastructure
    • SDG 8 – Decent Work and Economic Growth
    • SDG 3 – Good Health and Well-being
  • We voted at 74 meetings
VIEW REPORT

BMO Responsible Sterling Corporate Bond Fund

In 2019 we engaged with 35 companies across 13 countries held in the fund, with the aim of improving their management of environmental, social and governance issues.

  • 82% of activities aligned to the Sustainable Development Goals (SDGs)
  • Top engagement aligned to: SDG 8 and SDG 9:
    • SDG 8 – Decent Work and Economic Growth. Retail banking and insurance services support target 8.10, which aims for universal access to finance
    • SDG 9 – Industry, Innovation and Infrastructure. SDG 9 links to several business lines including loans to small and medium-sized businesses, supporting target 9.3 on financial services to small enterprises
VIEW REPORT

BMO Sustainable Opportunities European Equity Fund

In 2019 we engaged with 27 companies held in the fund, with the aim of improving their management of environmental, social and governance issues.

  • 76% of activities aligned to the Sustainable Development Goals (SDGs)
  • Key topics included engagement on
    • Data privacy (linked to SDG 16 – Peace, Justice and Strong Institutions)
    • Sustainable packaging and waste management (linked to SDG 12 – Responsible Production and Consumption)
  • We voted at 42 meetings
VIEW REPORT

Let's talk about risk

All of our funds involve a level of risk and the value of your investments can go down as well as up. The level of risk will depend upon the underlying investments in those funds. You need to be comfortable that you may not get back the original amount invested. Past performance should not be seen as an indication of future performance.

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