To support sustainable economic development, a new investment approach is required. This must be one whereby company performance is not solely calculated based on traditional financial metrics but also on actions to incorporate material environmental, social and governance (ESG) factors into long-term business strategy. Such an approach would help to minimise risks and maximise opportunities from sustainable development trends.
We launched our first Responsible Global Emerging Markets vehicle in early 2010 with this in mind. It was one of the first emerging markets funds that sought to integrate ESG considerations into the investment process. It was challenging to launch such a fund at a time when ESG reporting in emerging markets was very poor and companies were not used to (nor particularly open about) discussing ESG issues. However, we rose to the challenge, backed by BMO GAM’s impressive heritage in running ethical and ESG funds, and the strength and expertise of our Responsible Investment and Emerging Market investment teams. These have proved to be robust foundations that we have built on to improve the strategy’s ESG profile over time.