Canadian. Socially Responsible INVESTMENT. Review

Transcription

1 Canadian Socially Responsible INVESTMENT Review 2012

2 Contents Sponsors... 2 Project Staff... 3 Research Partners... 3 Executive Summary... 4 Methodology... 4 Highlights... 6 Terminology and Classification... 7 What is Socially Responsible Investing?... 7 Classifications Screening Integration Sustainability themed investing Impact/community investing Corporate engagement and shareholder action... 8 Assets by Category... 9 Pension Funds... 9 Asset Management Retail Investment Funds Impact Investing Sustainable Venture Capital Conclusion Appendix A: Assets under management calculation Appendix B: Mutual Funds and Retail Venture Funds using social and environmental criteria to select investments Appendix C: Asset Managers who have agreed to be listed in the Report Appendix D: Impact Investing Funds... 33

3 Sponsors The Social Investment Organization gratefully acknowledges the funding of its sponsors, without which this study would not have been possible. *With sponsorship for the impact investing portion of the report. 2

4 Project Staff The principal researchers in this project were: Ian Bragg, Associate Director, Research, Policy and Institutional Services, Social Investment Organization Daria T. Smeh,CEO & President at LoyalTeam Inc., who compiled and analysed impact investing data. Translation by: Groupe Investissement Responsable Inc. Research Partners Aisling Grogan, Client Services Analyst, Cleantech Group, who supplied data on sustainable venture capital deals. Prof. Marguerite Mendell and Valerie Bourdeau, Concordia University, who supplied data on Quebec social finance assets. John Son, General Manager Financial Services Group, Rogers Publishing, Canadian Institutional Investment Network, Benefits Canada, Canadian Investment Review, who provided total assets under management figures for the Canadian market The Social Investment Organization We encourage users to distribute information from the report with acknowledgement of the Social Investment Organization

5 Executive Summary The Canadian Socially Responsible Investment Review is the only comprehensive survey of SRI in Canada. Now in its seventh edition, the document has been produced by the Social Investment Organization (SIO) every two years since Since our last report just one-and-a-half years ago, socially responsible investment (SRI) assets in Canada continue to climb, showing growth in virtually every major market segment and outpacing growth of total assets under management. The last report came as markets were just beginning to recover from one of the worst financial crises in recent history. Since that time, markets have improved, with S&P/TSX Composite Index rising 5.8% and total assets under management growing by 9%. At the same time, total SRI assets have grown by 16%, with gains among institutional asset owners and managers, in the retail industry, and in impact investing. The only area that saw a decrease in assets was sustainable venture capital. SRI in Canada, at $600.9 billion commands 20%, or one-fifth of assets under management in the financial industry, showing a small proportional rise from June 30, 2010 when it was 19% of the market. SRI in Canada, at $600.9 billion commands 20%, or one-fifth of assets under management in the financial industry, showing a small proportional rise from June 20, 2010 when it was 19% of the market. Methodology This is the first year that the SIO is using December 31st as the year-end date for the report, and as such, this review is atypical in only measuring growth over one-and-ahalf years, rather than the typical two-year period. The primary reason for this change is that the SIO is harmonizing its review period with its global counterparts the sustainable investment organizations in Europe, the United States, Australia, Asia and Africa to produce the first ever harmonized global report on socially responsible investing. The present study is based on data collected through a survey of money managers and impact investment providers, combined with various publicly available sources, interviews, and self-reported information by pension funds and mutual fund companies. As well, data on sustainable venture capital deals was obtained from the leading expert organization in this area, the Cleantech Group LLC. Quebec impact investing data was provided by Professor Marguerite Mendell, of Concordia University. The total of all these sources was used as the final estimates contained in this report. One of the strongest growth areas since 2010 is in the institutional sphere, with pension plans increasingly integrating environmental, social and governance (ESG) considerations into the selection and management of investments and adopting comprehensive ESG engagement and proxy voting strategies. 4

6 Retail investment assets grew by 8% over the last year-and-a-half, continuing a trend dating back to the first Canadian study in 2000 of consistent year-over-year growth, with the exception of the decline seen in 2010 related to the global financial crisis. Given the growing interest in impact investing in the media, it is interesting to note that this area also saw real growth since 2010, growing by 20% to $5.2 billion in assets. With respect to the strategies employed by Canadian investors, three strategies dominate the market: corporate engagement and shareholder action, negative/exclusionary screening, and integration. This is largely a function of these being the main strategies employed by Canada s large pension funds that control the vast proportion of sustainable investing assets in Canada. While corporate engagement and shareholder action are mainstays of SRI for large asset owners, many of the large public pension funds also screen investments to avoid direct holdings of cluster munitions and landmine manufacturers. Unlike in some parts of Europe, there is no legal mandate restricting Canadian investors from holding shares in these companies. Negative or exclusionary screening is also the single largest strategy employed in the mutual fund industry, with 38% of funds screening on items such as tobacco, weapons contracting, and other issues. However, most SRI mutual fund families employ a combination of strategies, the most common of which is exclusionary screens combined with either a best-of-sector or integration approach. Approximately 11% of retail assets are managed with comprehensive corporate engagement strategies. 5

7 Highlights Summary of SRI assets in Canada ($ billions) Total Change ( ) Pension Funds Asset Managers Retail Investment Funds Impact Investments Sust. Venture Capital Total Assts restated to group core and broad strategies reported in 2010 and 2008 and to remove Renewable Energy Income Trust Assets from earlier years. As at December 31, 2011 Total Canadian assets invested according to socially responsible guidelines: $600.9 billion. SRI assets represent 20% of overall assets under management (AUM) in Canada, up slightly from 2010 when it was 19% of the market. 1 SRI assets grew by 16% over the last year-and-a-half. Pension fund assets account for $532.7 billion, or 89% of the total. Asset management firms investing funds under SRI mandates represent about $48.0 billion or about 8% of the total. Retail investment funds, SRI funds managed on behalf of individual clients in the retail market, totalled $13.5 billion, up 8% from 2010 and representing about 2% of the market. 2 Impact investing assets grew 20% from 2010, reaching $5.3 billion in Cleantech private placements accounted for about $1.3 billion of the total, the only area showing a decline from 2010, where it accounted for $1.4 billion. 1 For details on the assets under management calculation, see Appendix A. 2 Retail assets were restated for 2010, removing renewable energy income trusts. See Retail section for details. 6

8 Terminology and Classification What is Socially Responsible Investing? Socially Responsible Investing (SRI) is the integration of environmental, social and governance (ESG) factors in the selection and management of investments. For the purposes of this report, the SIO uses an inclusive definition of SRI without drawing distinctions between this and related terms such as responsible investing, sustainable investing, and sustainable and responsible investing, etc. Classifications In a collaborative effort, the SIO and other socially responsible and sustainable investment organizations came together in an effort to harmonize their approach to defining the major strategies of managing assets in a socially responsible manner. These organizations include the US Sustainable and Responsible Investment Forum, the European Sustainable Investment Forum, the Association for Sustainable & Responsible Investment in Asia and the Responsible Investment Association Australasia, and the Canadian Social Investment Organization. 2. Integration The explicit inclusion by investment managers of ESG factors into traditional financial analysis. Integration is different from screening in that integration combines ESG data, research and analysis together with the multitude of other financial and other factors in making investment decisions. Unlike screening, companies are not screened in or screened out of an investible universe. Integration must be demonstrated to be guided by a transparent and systematic process that is informed by ESG research and analysis. These organizations recognize five major SRI strategies: 1. Screening a. Negative/exclusionary screening - The exclusion from a fund or portfolio of certain sectors, companies or practices based on specific ESG criteria; b. Positive/best-in-class screening - Often referred to as best-of-sector screening in Canada, refers to investment in sectors, companies or projects selected for positive ESG performance relative to industry peers; c. Norms-based screening Screening of investments against minimum standards of business practice based on international norms Sustainability themed investing Investment in themes or assets specifically related to sustainability, such as clean energy or green technology, sustainable agriculture, etc. 3 Examples of international norms include the United Nations Global Compact and the OECD Guidelines for Multinational companies. 7

9 4. Impact Investing Targeted investments, typically made in private markets, aimed at solving social or environmental problems. Impact investing includes community investing, where capital is specifically directed to traditionally underserved individuals or communities, or financing that is provided to businesses with a clear social or environmental purpose, or to enterprising (i.e. revenue-generating) non-profits. 5. Corporate engagement and shareholder action This strategy employs shareholder power to influence corporate behaviour through direct corporate engagement (i.e. communicating with senior management and/or boards of companies), filing or co-filing shareholder proposals, and proxy voting that is guided by comprehensive ESG guidelines. 8

10 Assets by Category Pension Funds Pension funds represent the bulk of socially responsible investment (SRI) assets in Canada, totalling $532.7 billion. Pension funds must evaluate potential investments and associated risks and returns over timeframes that span multiple decades. As such, their perspective is inherently longer-term than many other investors. Leading pension funds recognize that while they must always be concerned with maximizing returns without undue risk of loss, they must also consider the long sustainability of investments. When evaluating investee companies for example, they look beyond price-earnings ratios and other typical considerations to also consider such things as the welfare of company employees and the communities where companies operate, and the physical environment on which companies depend. Long-term universal investors have an implicit understanding of the contradiction in making strong financial returns at the expense of societal and environmental well-being. Canada has a large and well-respected system of public management of our public pensions. These institutions represent some of the largest investment managers in Canada, as well as some of the largest institutional investors in the world. Many of these institutions have been early adopters of responsible investment policies and continue to show leadership in responsible investment worldwide. Long-term universal investors have an implicit understanding of the contradiction in making strong financial returns at the expense of societal and environmental well-being. 9

11 The approaches taken by these funds include a number of strategies. The most common is corporate engagement and shareholder action, which includes directly engaging with the boards and senior management of portfolio companies on ESG issues, as well as filing and voting on shareholder resolutions on ESG issues. The other prevalent strategy is the integration of ESG considerations alongside traditional financial measures in the analysis and selection of investments and screening out public equities involved in cluster munitions and landmine manufacturing. This is notable because unlike in some parts of Europe, there is no legal mandate restricting Canadian investors from holding shares in these companies. Many of these funds also participate in investor collaborations on ESG issues, such as corporate governance, climate change, and extractive industries disclosure. Many of these funds are signatories to the United Nations-backed Principles for Responsible Investment (UN PRI) 4, a global coalition of signatories on responsible investment, which has compiled a list of responsible investment principles for institutions to follow. These principles define the commitment of signatories to the Principles for Responsible Investment. They include: 1. incorporation of ESG issues into investment analysis and decision-making processes; 2. incorporation of ESG issues into ownership policies and practices; 3. pursuit of appropriate disclosure on ESG issues by the entities in which the institutions are invested; 4. promotion of acceptance and implementation of the principles within the investment industry; 5. collaboration to enhance the effectiveness of institutions in implementing the principles; 6. reporting on activities and progress towards implementing the principles. 4 THE PRINCIPLES FOR RESPONSIBLE INVESTMENT, an initiative of the UN Environment Program and the UN Global Compact. 10

12 Estimating SRI Assets To determine whether certain pensions fall within the definition of SRI for the purposes of this report, the SIO established the following necessary criteria: 1. A responsible investment policy that applies to the entire investment portfolio. 2. Evidence that the pension is implementing its policy. 3. Detailed proxy voting guidelines that address environmental, social and governance (ESG) issues and evidence that it votes its proxies under these guidelines. 4. Evidence that the pension is doing one or more of the following: a. systematically integrating ESG factors into its investment analysis and selection process; b. executing a formal engagement program where the fund engages independently or in collaboration with other investors with individual portfolio companies on ESG issues; c. exclusionary screening of assets on ESG issues such as weapons manufacturing, tobacco, or other issues; d. using ESG analysis for at least a portion of its non-public market investments, such as real estate, private equity or infrastructure. These are the same criteria that were used for evaluation in the 2008 and 2010 reports; however, this is the first year that the SIO has established four necessary conditions for pension fund assets to be considered under the definition of SRI. This change reflects both a tightening of definitions in Canada and abroad with respect to what is considered socially responsible, responsible, or sustainable investing and the rising standards of practice within pension investment management. Our study found an increase in SRI pension assets of 17% from This increase is reflective of the general increase in assets related to rising investment markets generally, but also the inclusion of two funds that have been identified as meeting the criteria. Our estimate is composed of assets of the following pension funds. Since not all pensions have the same reporting date, it is not possible to confirm the assets for December 31, 2011 (the effective date of assets used elsewhere in this report). Therefore, we have included the reporting date for the assets for each institution included. Profiles of each are included below the chart. Pension Fund Name Assets ($ billions) Reporting Date Canada Pension Plan Investment Board (CPPIB) June 30, 11 Caisse de dépôt et placement du Québec (CDP) 159 Dec. 31, 11 BC Investment Management Corp. (bcimc) 91.1 March 31, 11 PSP Investments 64.5 Dec. 31, 11 Healthcare of Ontario Pension Plan (HOOPP) 40.3 Dec. 31, 11 OPSEU Pension Trust (OPTrust) 13.7 Dec. 31, 11 Assets held by various construction industry pension funds invested in Concert Properties 1.6 Dec. 31, 11 Fonds Bâtirente 0.9 Dec. 31, 11 11

13 Carbon Disclosure Project The Carbon Disclosure Project (CDP) is an independent not-for-profit organization working to drive greenhouse gas emissions reduction and sustainable water use by business and cities. For over a decade CDP has worked to tackle climate change. According to the CDP, systemic change a real transformation of the global economic system is required if we are to achieve the scale of change that will limit global warming and prevent catastrophic climate change. The CDP system has helped move climate change and energy efficiency onto the business radar and into mainstream business thinking. There are three pillars to the CDP approach to climate change: Request information on greenhouse gas emissions, energy use and the risks and opportunities from climate change from thousands of the world s largest companies. CDP does this on behalf of 655 institutional investors with $78 trillion in assets. Through measurement and transparency companies are better placed to manage carbon and protect themselves from climate change risk. Disclosed information is made available by CDP for integration in business, investment and policy decision making. Use the power of the shareholder to drive greenhouse gas emissions reduction. CDP co-ordinates a request from a group of investors asking the world s largest companies in high emitting sectors to implement cost-effective emissions reductions. This expands on the Investor CDP program s disclosure request to accelerate greater action by companies around the world. Provide companies with carbon management support services. CPD has developed a services package that helps companies take a rigorous approach to carbon management, benchmark business performance and learning best practices. Canadian Pension Funds British Columbia Investment Management Corporation (bcimc) Total Assets Under Management: $91.1 billion as of March 31, bcimc independently provides investment management services to the British Columbia public sector and is one of Canada s largest institutional fund managers. bcimc was one of the founding investor signatories to the UN Principles for Responsible Investment (UN PRI) in bcimc encourages public companies to implement good governance and corporate responsibility practices through engagement. Engagement is supported by its Shareholder Engagement Guidelines and includes the following activities: 1. Voting the proxies in Canada around the world. 2. Directly meeting and corresponding with corporate management and directors. 3. Exchanging information and pooling resources with like-minded investors. 4. Lobbying government and regulatory bodies for reforms. bcimc also invests in clean, green private placement, mortgage and real estate opportunities when appropriate and it has divested from companies it deems in contravention of international landmines and cluster munitions treaties. bcimc is also a member of the Canadian Coalition for Good Governance, the Investor Network on Climate Risk, and is a signatory to the Carbon Disclosure Project. 12

14 Caisse de dépôt et placement du Québec Assets Under Management: $159 billion as of December 31, The Caisse de dépôt, serving Quebec public and private pension funds and insurance plans, is one of the largest institutional fund managers in North America and one of the world s 10 largest real estate asset managers. The Caisse de dépôt et placement du Québec promotes responsible investment in various ways: Through direct dialogue with companies Through the integration of environmental, social and governance (ESG) criteria in the investment analysis process Through the exercise of voting rights. In 2011, the Caisse exercised its voting rights at 4,890 shareholder meetings in Canada, the United States, and worldwide. Exclusion from its portfolios of securities in violation of local or international law, such as those of companies that manufacture cluster bombs and land mines. Canada Pension Plan Investment Board (CPPIB) Assets Under Management: $152.8 billion as of December 31, The Canada Pension Plan Investment Board (CPPIB) invests in over 3,000 public companies worldwide to independently manage the CPP funds on behalf of all Canadians. The CPPIB has extensive guidelines for responsible investing in the form of its Policy on Responsible Investing (2005) and has built an engagement capability and encourages improved performance on and disclosure of environmental, social and governance factors. The policy is based on a risk-return viewpoint and aims to integrate ESG factors into investment management portfolios, engage extensively (directly, collaboratively and through proxy voting) with corporations and maintain transparency in reporting. Implementation of this policy is evident by the 2012 Report on Responsible Investing. A major part of the CPPIB s initiatives are related to engaging companies in which it invests in four focus areas : extractive industries; climate change; water; and executive compensation. In addition, the CPPIB has participated in several Canadian Coalition for Good Governance executive compensation engagements in 2011 and has been a participant in the UN PRI Engagement Clearinghouse focused on adherence to the UN Global Compact. The CPPIB also uses its Proxy Voting Principles and Guidelines to use proxy votes. In the twelve months ending June 30, 2012, the CPPIB participated in 3,625 meetings with over 36,000 agenda items and voted against 9.1% of them. Finally, CPPIB does not directly invest in companies that are not in compliance with Canada s Anti- Personnel Mines Convention Implementation Act, or that would not be in compliance if they operated in Canada, and it has divested of any direct holdings of companies involved in the use, development, production, stockpiling and transfer of cluster munitions as defined by the Convention on Cluster Munitions. Comité syndical national de retraite Bâtirente Total Assets under Management: $0.911 billion as of December, Bâtirente s responsible investing strategy is described in the Guidelines on extrafinancial risks management. Bâtirente analyzes the performance of its portfolios based on the Guidelines, identifies companies based on ESG risk exposure and other factors and engages with them to encourage better management of extra-financial risks and opportunities. In addition, Bâtirente participates in investor and multistakeholder initiatives aiming to improve corporate ESG policies and practices, including UN Principles for Responsible Investments, Boreal Leadership Council, Carbon Disclosure Project, Committee on Worker Capital and Extractive Industries Transparency Initiative. Since 2008, proxy voting has been delegated to the Groupe investissement responsable. 13

15 Healthcare of Ontario Pension Plan (HOOPP) Total Assets under Management: $40.3 billion as of December 31, HOOPP is the leading pension provider for Ontario s healthcare community, with over 250,000 members serviced. HOOPP released a Responsible Investing Policy in April, The policy encourages engagement with companies on ESG issues and disclosure, and mandates HOOPP to vote its proxies on ESG issues. The Policy has been developed based on the UN PRI, the OECD Guidelines to Multinational Enterprises and the Ceres principles on the environment. HOOPP has also sought LEED (Leadership in Energy and Environmental Design) certification on real estate investments and developments. HOOPP is a founding member of the Canadian Coalition for Good Governance (CCGG) and a signatory to the UN Principles for Responsible Investment (UN PRI), Carbon Disclosure Project (CDP) and the Extractive Industries Transparency Initiative (EITI). PSP Investments Total Assets Under Management: 64.5 billion as of December 31, PSP Investments has adopted a Responsible Investment Policy which embodies its belief that responsible corporate behaviour with respect to ESG factors can generally have a positive influence on long-term financial performance. In analyzing the risks inherent in any investment, PSP Investments looks to identify, monitor and mitigate ESG issues that are, or could become, material to long-term financial performance. Consideration of ESG risks is part of the due diligence process with respect to potential investments and the assessment of the practices of external managers. The central pillars of PSP s responsible investing program are direct engagement activities and proxy voting. PSP, with the assistance of an external service provider, actively engages in dialogue with public companies with a view to improving their ESG practices. According to PSP, public companies are selected for engagement based on a process that takes into account elements such as a company s ability to create shareholder value, the prospects for successful engagement and the ESG issues at hand. In addition to its direct-engagement efforts with public companies, PSP Investments participates in collaborative governance initiatives and engagements with other likeminded institutional investors to strengthen its voice with regard to corporate governance issues. PSP Investments is an active member of the Canadian Coalition for Good Governance and the Carbon Disclosure Project. PSP Investments also has a Renewable Resources group that was created in June The group invests globally in timberland, agriculture and related opportunities via direct investments or partnerships. Pension Funds that Invest in Concert Properties Total Assets Under Management: $1.6 billion as of December 31, 2011 Concert Properties is a property development company that is owned exclusively by Canadian union and management pension plans and was established in 1989 to build affordable housing and provide jobs for unionized workers. Labelling itself as the developer with a difference Concert is committed to the preservation, restoration and enhancement of the environments in which it builds. In addition to generating economic returns, Concert is dedicated to environmental sustainability and social causes. The company is considered one of the best examples of economically-targeted investment in Canada, primarily for its explicit role in generated urban revitalization. For example, Concert has been responsible for transforming 33 acres of industrial land into a residential community in Collingwood Village in Vancouver, and has undertaken numerous land infill projects to prevent urban sprawl. 14

16 Pension plans that are shareholders in Concert Properties Boilermakers Pension Trust Fund Bricklayers and Masons Pension Plan Carpentry Workers Pension Plan of B.C. Ceramic Tile Workers Pension Plan Local 213 Electrical Workers Pension Plan Floorlayers Industry Pension Plan Heat & Frost Local 118 Union Pension Plan IWA - Forest Industry Pension Plan Labourers Pension Plan of B.C. Marine and Shipbuilders Local 506 Pension Plan Operating Engineers Pension Plan Piledrivers, Divers, Bridge, Dock & Wharf Builders Pension Plan The Plumbers Union Local 170 Pension Plan The Pulp and Paper Industry Pension Plan Shopworkers Industrial Union Local 1928 Pension Plan Teamsters (Local 213) Pension Plan Teamsters Canadian Pension Plan Telecommunication Workers Pension Plan United Food and Commercial Workers Union Pension Plan 15

17 Asset Management The investment management industry in Canada is a major player in the management of assets held by Canadian institutional and individual investors. Asset management firms invest on behalf of a wide variety of clients, including mutual funds, insurance companies (both for insurance company clients and the companies themselves), high net worth individuals, endowments and foundations, corporations, pension funds (both in pooled and segregated accounts), trust funds, sub-advised funds of various kinds, and other client types. Benefits Canada Magazine estimates that total non-mutual-fund assets of the industry in Canada was $1.16 trillion, representing 40% of the total assets under management (mutual funds, pension funds and asset management) or $2.98 trillion included in this report. According to our survey, there are 24 asset management firms with dedicated SRI offerings, with total SRI assets under management of $48.1 billion. This represent four per cent growth from June 31, 2010, when there was $46.3 billion in SRI assets under management. Asset management firms employ a range of SRI approaches, including negative/ exclusionary screening, positive/best-in-class screening, integration, sustainability themed investing and corporate engagement and shareholder action. Many firms employ a combination of these strategies. 16

18 Asset managers: A summary of socially responsible investment strategies 5 SRI Strategy Assets (millions) # of Asset Managers Employing Strategy Negative/exclusionary screening 43, Positive/best-in-class screening 3,351 7 Integration 3,173 4 Corporate engagement and shareholder action 1,429 1 Sustainability themed investing 4 4 Impact investing 0 0 the dominant strategy employed by asset managers on behalf of their clients is negative/exclusionary screening. From the chart above, it is clear that the dominant strategy employed by asset managers on behalf of their clients is negative/ exclusionary screening. This is partly a function of the large number of assets managed on behalf of religious institutional clients, but it is also partly because of the size of some large funds with single-issue screens such as tobacco. The other major issues used to screen assets include environmental performance, human rights issues, and weapons contracting. Some assets are counted in more than one category as some managers use multiple strategies in combination. 5 Methodological notes Many asset managers employ more than one SRI strategy. As such, some assets are counted twice or even three times in the different strategies and the total assets of the combined strategies therefore exceeds total SRI assets under management. To determine the value of screened assets under asset managers, SIO surveyed money management firms in Canada using information from past surveys and updated information from the Benefits Canada 2011 Leading Money Managers Directory and the Benefits and Pensions Monitor 2011 Annual Report and Directory of Money Managers. The money managers received a survey from the SIO which was followed up by telephone. Assets managed on behalf of pension plans already counted in this survey were subtracted to avoid double-counting. 17

19 Retail Investment Funds Retail investors are the historical foundation of SRI in Canada and remain a strong and growing force in the market. Retail investors are individuals who typically wish to align their investments with their values. In the Canadian market, there are two basic vehicles for socially responsible investing mutual funds and retail venture capital funds. 6 Socially responsible mutual funds 7 are professionally managed, diversified pools of investments. In this way, they are very similar to conventional mutual funds. But SRI mutual funds offer an additional level of analysis and investment by using one or a combination of the major SRI strategies: exclusionary/negative screening, positive/best-of-sector screening, integration, sustainability themed investing, and corporate engagement and shareholder action. There are no examples of dedicated impact investing strategies in the Canadian mutual fund market. 6 For many years, Canadians also had the opportunity to invest in renewable energy income trusts. Income trusts are pools that hold investments in various businesses and flow the earnings through to unitholders. Income trusts grew in popularity over the last decade, in part due to their high-yielding structure and performance and, in part, as a strategy to reduce or eliminate corporate tax payable. Renewable energy income trusts had become one of the chief means to create investment capital for renewable or low-emission energy sources such as hydroelectricity, co-generation, alternative fuels, thermal energy, wind, and biomass energy. However, in 2006, the Canadian Ministry of Finance implemented of series of tax and other measures to effectively kill the income trust structure and to compel the vast majority of income trusts to convert back to corporations. The effective date for this change was January 1, As such, the renewable energy income trusts and thus a substantial portion of SRI retail assets, are no longer in existence. In fact, in 2010, the date of the last report, assets of renewable energy income trusts comprised just over 50% of all SRI retail assets. For the purposes of meaningful comparison, these assets, that appeared on the market in substantial quantities after the 2002 study, and have now since disappeared, have been removed from the retail category. 7 The Social Investment Organization uses the following definition to identify socially responsible mutual funds: In order to be defined as a socially responsible mutual fund, SIO stipulates that a fund must use one or more SRI strategies as part of its investment selection process, and that these strategies must be communicated in the fund s prospectus. 18

20 Retail venture capital funds 8 are professionallymanaged pools that invest in small-and-midsize companies in the start-up or expansion phase of their development. This group of funds has grown out of the labour-sponsored venture capital funds that offer federal and provincial tax credits in many provinces in Canada. Socially responsible retail venture capital funds employ the same investment strategies as the mutual funds but in some cases, funds use a social audit process to examine the employment, community, supplier and customer record of potential investee companies and this social audit information is used to determine investment worthiness along with the company s financial strength. 8 Socially responsible retail venture capital funds must invest in sustainable cleantech companies, or companies with good performance on employment, community, supplier or customer-relations issues. 19

21 Retail Assets ($ millions) SRI Mutual Funds SRI Retail Venture Capital Funds Totals As at December 31, 2011, retail investment fund assets, including SRI Mutual Funds and SRI Retail Venture Capital Funds totalled $13.5 billion, showing an 8% increase from As at December 31, 2011, retail investment fund assets, including SRI Mutual Funds and SRI Retail Venture Capital Funds totalled $13.5 billion, showing an 8% increase from This growth is encouraging, especially given the decline in assets seen in the 2010 report. Of course, most of that decrease was a direct result of the decline in capital markets in Canada and worldwide relating to the global financial crisis and the protracted decline in equity markets. For example, between July 2008 and June 2010 the Toronto Stock Exchange Composite Index fell 19.5%. A chart of mutual funds and retail venture funds using social and environmental criteria to select investments is set out in Appendix B. 20

22 Impact Investing Impact investing refers to targeted investments, typically made in private markets, aimed at solving social or environmental problems. Impact investing includes community investing, where capital is specifically directed to traditionally underserved individuals or communities, or financing that is provided to businesses with a clear social or environmental purpose, or to enterprising (i.e. revenue-generating) non-profits. This is the second year that the term impact investing is used to identify this area of socially responsible investment. The research found a total of $5.3 billion in impact investing assets in Canada, a 20% increase from the $4.5 billion in Community Loan Funds and Social Venture Capital Credit Unions Quebec Foundations International Impact Investments Aboriginal Community Futures Development Corporations 4, , Updated assets for Quebec and the foundation category are not available for this year s report. As such, there is no reported growth. However, there is notable growth in every other category of impact investing, showing steady growth in this segment of SRI. Categories of Impact Investing Impact investing assets are a combination of assets in seven major categories. These are explained in detail below. Impact investing includes community investing, where capital is specifically directed to traditionally underserved individuals or communities, or financing that is provided to businesses with a clear social or environmental purpose, or to enterprising (i.e. revenue-generating) non-profits. 21

23 Aboriginal Focused Funds Many aboriginal funds were capitalized by government, in a similar fashion to the CFDCs (see below) to inspire and invest in community and business development. In this scan they were separated, given they deal with a specific population. Also in this category is the CAPE Fund, which is a private-sector investment fund initiated by 21 of Canada s leading companies, individuals and US based Foundations. Community Futures Development Corporations (CFDCs) The Community Futures Program is a Government of Canada initiative which supports local Community Futures Development Corporations (CFDCs). CFDCs offer a wide variety of programs and services supporting community economic development and small business growth. The CFDCs are community-based, not-for-profit organizations each run by a board of local volunteers. They are staffed by professionals who encourage entrepreneurship and the pursuit of economic opportunities. Credit Unions Credit Unions were founded on seven cooperative principles in the early 1900s to meet the needs in underserved communities. Since that time, they have worked hard to offer the same products and services that banks do and to reduce differences between them. A few however, have identified community investment as a component of their work and are involved in micro-finance and community renewal activities. It is those assets that are noted here. Community Loan Funds and Social Venture Capital Community funds were started in the 1990s and are the most diverse of all the community investment organizations, providing loans and equity for business, housing, training, social enterprise and employment generation. They provide various training programs and asset development initiatives. They include local community funds, peer lending circles and community investment funds, where share capital is raised. Social venture capital refers to financing provided to businesses or non-profits that have clear social and environmental objectives. Like other impact investors, social venture investors seek a blended return of positive social and environmental impact as well as financial reward. Community funds and social finance are grouped together because quite often investment organizations seek to support businesses or non-profits with a clear mission of positive social change while at the same time serving borrowers who are disadvantaged or underserved by mainstream markets. The Canadian Alternative Investment Cooperative (CAIC) for example, makes loans available to groups working to provide social and affordable housing in Canada and only considers applications where other sources of affordable financing are not available. See the IN FOCUS section for more details. Foundations As defined in Coro Strandberg s The State of Community/Mission Investment of Canadian Foundations, community/mission investment is defined as direct investments in community, or social/environmental enterprises consistent with the mission of the foundation. These investments may be program-related investments which anticipate a below-market rate of return or market-rate investments in mission-related enterprises. 22

24 International Impact Investments This category represents Canadian investments in impact investments overseas and includes investments by organizations such as by Mennonite Economic Development Associates (MEDA) and Oikocredit Canada. Quebec In Quebec, the three main categories of impact investing include development capital, solidarity finance and hybrid funds. In both development capital and solidarity finance, investment decisions are taken on the basis of socio-economic or triple-bottom-line objectives. Development capital, however, invests primarily in private enterprises whereas solidarity finance refers to those financial institutions that invest primarily in social economy enterprises (that is collectively owned enterprises and nonprofits). Quebec has a unique history with respect to impact investment, and this history has given rise to categories that are not easily comparable to other provinces. As articulated by Dr. Marguerite Mendell, this history is largely rooted in agricultural cooperatives formed in the early 20th century 9. However, it is also a function of the unique power and influence of social movements, community groups and organized labour. In Focus: Canadian Alternative Investment Cooperative CAIC CAIC is a social lender which is rooted in the social justice movement. It has been providing financing to non-profits, charities, social entrepreneurs and cooperatives for more than 25 years. CAIC is mandated by its members to make mortgages available to non-profits or charitable organizations working to provide social services in their communities. CAIC is also mandated by its members to make loans available to groups working to provide social and affordable housing in Canada. CAIC will only consider applications where other sources of affordable financing are not available. Finally, CAIC provides loans & equity investments to groups, organizations & cooperatives assisting the economic development of disadvantaged people or communities and whose objectives are considered to be of social benefit by CAIC s Board of Directors. The organization may be a corporation or a co-operative. The investment may be debt or equity, secured or unsecured. Receivable Assets Available Assets Total Assets $3.4 million $3.8 million $7.2 million *as of September 30, The Social Economy in Quebec. VIII Congreso Internacional del CLAD sobre la Reforma del Estado y de la Administración Pública, Panamá, Oct Marguerite Mendell 23

25 Sustainable Venture Capital related to sustainable development. Thus, sustainable venture capital is an investment theme in which investments are made in companies producing products and services optimizing natural resources and minimizing environmental impacts. A number of factors led to a decline in Canadian cleantech investment over the last yearand-a-half, including historically low natural gas prices, European and American cleantech subsidies receding form historic levels, and lowcost competition from China. Sustainable venture capital is similar to conventional venture capital in that it is typically private equity capital provided to early-stage, high-potential, growth companies generating high rates of return through an exit strategy, most likely an initial public offering or a sale of the company. Venture capital investments are generally made as cash in exchange for shares in the invested company. Venture capital typically comes from institutional investors and high net worth individuals and is pooled together by dedicated investment firms. In addition to high rates of return, sustainable venture capital investors also seek investments Sustainable venture capital is also related to the development of clean technology, or cleantech. The Cleantech Group LLC, which has monitored the development of cleantech, states: Cleantech represents a diverse range of products, services, and processes, all intended to: 1. Provide superior performance at lower costs, while; 2. Greatly reducing or eliminating negative ecological impact, at the same time as; 3. Improving the productive and responsible use of natural resources. 10 Sustainable venture is an attractive investment for conventional institutional investors and high net worth individuals who are interested in high returns while investing in interesting innovations related to important economic and sustainability trends. As such, investors are attracted to sustainable venture capital for high potential returns while realizing some sustainability benefits. Value of Cleantech Invesment in Canada Year Value of Deals ($ millions) # of Deals Total 1, Sustainable Venture Capital represented $1.3 billion in investment, representing a 7% decline from the $1.4 billion recorded in the last report. This is the only area within SRI that has seen a decline in the last year-and-a-half. This is perhaps not surprising given the difficult time recently experienced by the cleantech sector. A number of factors led to a decline in Canadian cleantech investment over the last year-and-a-half, including historically low natural gas prices, European and American cleantech subsidies receding form historic levels, and low-cost competition from China. 10 Cleantech Group LLC. Definition of cleantech. 24

26 Cleantech Industry Segments Segment Energy Generation Energy Storage Energy Infrastructure Energy Efficiency Transportation Water and Wastewater Air and Environment Materials Manufacturing/Industrial Agriculture Recycling & waste Industry Wind Solar Hydro/Marine Biofuels Geothermal Other Fuel Cells Advanced Batteries Hybrid Systems Management Transmission Lighting Buildings Glass Other Vehicles Logistics Structures Fuels Water Treatment Water Conservation Wastewater Treatment Cleanup/Safety Emissions Control Monitoring/Compliance Trading & Offsets Nano Bio Chemical Other Advanced packaging Monitoring and control Smart production Natural pesticides Land management Aquaculture Recycling Waste Treatment Source: To estimate the value of investments in this sector in Canada as at December 31, 2011, SIO asked the Cleantech Group LLC to provide the value of cleantech deals in Canada for the last five years. This is consistent with the practice in the venture capital industry to hold investments for approximately five years before exit. We believe this provides an accurate estimate of the assets of the sustainable venture capital industry in Canada and the growth of this industry over time. 25

27 Conclusion Today, there is a much broader acceptance among fund managers and individual investors about the growing importance of ESG factors to investment returns. With the uncertainty and volatility that has characterized financial markets in Canada and around the world in last year-and-a-half, it is encouraging to see that SRI assets grew in this country by 16%. It is also notable that the market penetration of SRI nudged upward from 19% to 20%. While growth in the industry can certainly be attributed in large part to the overall growth of Canada s large public pension plans with socially responsible investment programs, there was growth in retail assets, the asset management sector, and in impact investing. While SRI is showing that it is recovering alongside traditional investments, we believe that there is still a great deal of potential growth yet to be realized. Today, there is a much broader acceptance among fund managers and individual investors about the growing importance of ESG factors to investment returns. As stated in our last report, investors understood that the financial collapse beginning in 2008 was in part caused by a failure to understand the fundamental ESG trends driving corporate prospects, in particular, the risks associated with predatory lending, poor governance practices that encouraged executives to assume unwarranted risk, and a shortterm view of value. Hurricane Sandy has since dramatically pushed climate change back into the consciousness of policy makers. In the words of Chicago Mayor and former White House Chief of Staff Rahm Emanuel, we cannot afford to let a good crisis go to waste. Canadian investors in particular, operate in a country rich in fossil fuel resources and with capital markets heavily tied to resource extraction. We cannot avoid internalizing the externalities of climate change and other critical environmental and social issues. The ongoing debates of pipeline construction from the oilsands is a case in point. In the coming years, there will be increasing adoption of ESG measures by mainstream investors and increasing convergence of the mainstream and socially responsible investors. Today, there is a clear opportunity for our industry to demonstrate that doing the right thing has never been more clearly linked to doing well. 26

28 Appendix A Assets under management calculation The total of SRI assets under management was calculated using the following formula. The total AUM includes the Benefits Canada survey of asset managers total industry assets (minus the assets that are managed for mutual funds). To include mutual funds, the Investment Funds Institute of Canada (IFIC) total industry assets are used from their June 2011 statistical report. To include pension assets not included in the Benefits Canada survey, the total industry assets in the annual Pension Investment Association of Canada (PIAC) composite asset mix reports are included. This creates an asset total for the asset management industry, the mutual fund industry and the pension industry. Total Assets Under Management (AUM - $ billion) Benefits Canada assets (1) $1, $1, $1, $1, $1, $1, Benefits Canada Mutual Fund Assets (2) $ $ $ $ $ $ Net Benefits Canada Assets (Total assets minus mutual funds assets) $ $1, $1, $1, $1, $1, PIAC assets (3) $ $ $ $ $ $1, IFIC assets June (4) $ $ $ $ $ $ TOTAL Assets under management $1, $2, $2, $2, $2, $2, CSRIR assets for inclusion in calculation CSRIR total (5) $51.42 $65.40 $ $ $ $ CI, SR lending and sustainable VC (6) $0.20 $2.35 $3.35 $5.56 $5.76 $1.30 Net CSRIR assets for inclusion in calculation $51.22 $63.05 $ $ $ $ % AUM assets (% net CSRIR assets of total assets under management) 2.90% 3.20% 17.50% 20.40% 19.14% 20.11% 1. Total industry assets, Benefits Canada 2. Total assets identified as invested in retail individual investor mutual funds 3. Total assets of all funds Dec. 31, PIAC publications page 4. IFIC June 2011 Analytical Package 5. Total from the CSRIR final report 6. This is restated using the new estimate for VC assets. 27

29 Appendix B Mutual Funds and Retail Venture Funds using social and environmental criteria to select investments. Cdn Dividend and Income Equity Ethical Canadian Dividend Fund Series A Ethical Canadian Dividend Fund Series F Fund Codes NWT072, NWT10072, NWT172, NWT272, NWT372 NWT972 Canadian Equity Desjardins Environment Fund GWL Ethics (G) 100/100 GWL Ethics (G) 75/100 GWL Ethics (G) 75/75 GWL Ethics Fund (G) DSC GWL Ethics Fund (G) NL IA Clarington Inhance Canadian Equity SRI Class A IA Clarington Inhance Canadian Equity SRI Class F LON Ethics (G) 100/100 LON Ethics (G) 75/100 LON Ethics (G) 75/75 London Life Ethics Fund (GWLIM) Meritas Jantzi Social Index Fund Meritas Jantzi Social Index Fund Series F Meritas Monthly Dividend and Income Fund Meritas Monthly Dividend and Income Fund Series F PH&N Community Values Canadian Equity Fund Advisor PH&N Community Values Canadian Equity Fund Ser B PH&N Community Values Canadian Equity Fund Ser C PH&N Community Values Canadian Equity Fund Ser D PH&N Community Values Canadian Equity Fund Ser F RBC Jantzi Canadian Equity Fund Advisor Series RBC Jantzi Canadian Equity Fund Series A RBC Jantzi Canadian Equity Fund Series D RBC Jantzi Canadian Equity Fund Series F Canadian Equity Balanced Acuity Social Values Balanced Fund Class A Ethical Balanced Fund Class A Ethical Balanced Fund Class F Ethical Select Canadian Growth Portfolio Class A Ethical Select Canadian Growth Portfolio Class F IA Clarington Inhance Growth SRI Portfolio Ser A IA Clarington Inhance Growth SRI Portfolio Ser F IA Clarington Inhance Monthly Income SRI Fund F6 IA Clarington Inhance Monthly Income SRI Fund T6 Meritas Growth & Income Portfolio Series A Meritas Growth & Income Portfolio Series F Canadian Fixed Income Meritas Canadian Bond Fund Meritas Canadian Bond Fund Series F NEI Canadian Bond Class A NEI Canadian Bond Class F PH&N Community Values Bond Fund Advisor Series PH&N Community Values Bond Fund Series B PH&N Community Values Bond Fund Series C DJT00009 GWL1039, GWL839, GWL939 GWL439, GWL539, GWL639 GWL139, GWL239 GWL72312 GWL72212 CCM5005, CCM5006, CCM5007 CCM5008 LON1047, LON847, LON947 LON447, LON547, LON647 LON047, LON147, LON247 LLI507 SRI003, SRI103, SRI503 SRI303 SRI007, SRI107, SRI507 SRI307 PHN4620, PHN6620 PHN7620 PHN3620 PHN620 PHN5620 RBF212, RBF784, RBF868 RBF302 RBF1043 RBF651 AGF9613, AGF9617, AGF9628 NWT064, NWT10064, NWT164, NWT264, NWT364 NWT964 NWT020, NWT10020, NWT10120, NWT320 NWT920 CCM5025, CCM5026, CCM5027 CCM5028 CCM5003 CCM6000, CCM6001, CCM6002 SRI008, SRI108, SRI508 SRI308 SRI002, SRI102, SRI502 SRI302 NWT062, NWT10062, NWT162, NWT262, NWT362 NWT962 PHN4610, PHN6610 PHN7610 PHN

30 PH&N Community Values Bond Fund Series D PH&N Community Values Bond Fund Series F Canadian Fixed Income Balanced Ethical Select Conservative Portfolio Class A Ethical Select Conservative Portfolio Class F IA Clarington Inhance Conservative SRI Port T6 Meritas Income & Growth Portfolio Series A Meritas Income & Growth Portfolio Series F SocieTerra Secure Market Portfolio Canadian Focused Equity Acuity Social Values Canadian Equity Fund Class A Acuity Alpha Social Values Portfolio Class A Ethical Growth Fund Series A Ethical Growth Fund Series F Investors Summa SRI Class A Investors Summa SRI Class B Investors Summa SRI Fund Series A Investors Summa SRI Fund Series B Investors Summa SRI Fund Series C Canadian Focused Small/Mid Cap Equity Acuity Clean Environment Equity Fund Class A Matrix Sierra Equity Fund Matrix Sierra Equity Fund Class F Canadian Money Market Meritas Money Market Fund Meritas Money Market Fund Series F Canadian Neutral Balanced Ethical Select Canadian Balanced Portfolio Class A Ethical Select Canadian Balanced Portfolio Class F IA Clarington Inhance Balanced SRI Portfolio Sr T6 Meritas Balanced Portfolio Meritas Balanced Portfolio Series F PH&N Community Values Balanced Fund Advisor Series PH&N Community Values Balanced Fund Series B PH&N Community Values Balanced Fund Series C PH&N Community Values Balanced Fund Series D SocieTerra Balanced Portfolio Canadian Small or Mid Cap Equity Ethical Special Equity Fund Series A Ethical Special Equity Fund Series F PHN610 PHN5610 NWT014, NWT10014, NWT114, NWT214, NWT314 NWT914 CCM5015, CCM5016, CCM5017 SRI009, SRI109, SRI509 SRI309 DJT00018 AGF9522, AGF9523, AGF9527 AGF1040, AGF1043, AGF1047 NWT060, NWT10060, NWT160, NWT260, NWT360 NWT960 IGI190 IGI191 IGI288 IGI380 IGI013, IGI088 AGF137, AGF9165, AGF9623, AGF9626 MAV110, MAV210, MAV410, MAV510 MAV730 SRI001, SRI101, SRI501 SRI301 NWT019, NWT10019, NWT10319, NWT119 NWT919 CCM6020, CCM6021, CCM6022 SRI006, SRI106, SRI506 SRI306 PHN4640, PHN6640 PHN7640 PHN3640 PHN640 DJT00021 NWT067, NWT10067, NWT167, NWT267, NWT367 NWT967 Global Equity Acuity Social Values Global Equity Fund Class A BMO Sustainable Opportunities Class Ethical Global Dividend Fund Series A Ethical Global Dividend Fund Series F Ethical Global Equity Fund Class A Ethical Global Equity Fund Class F HSBC Global Climate Change Fund Advisor Series AGF9582, AGF9583, AGF9587 BMO226, GGF70226 NWT084, NWT10084, NWT184, NWT384 NWT984 NWT069, NWT10069, NWT169, NWT269, NWT369 NWT969 29

31 HSBC Global Climate Change Fund Advisor U$ HSBC Global Climate Change Fund Institutional Ser HSBC Global Climate Change Fund Investor Series HSBC Global Climate Change Fund Investor U$ HSBC Global Climate Change Fund Manager Series HSBC Global Climate Change Fund Premium Series HSBC Global Climate Change Fund Premium Series U$ IA Clarington Inhance Global Equity SRI Class A IA Clarington Inhance Global Equity SRI Class F Investors Summa Global SRI Fund Series A Investors Summa Global SRI Fund Series B Investors Summa Global SRI Fund Series C Mac Universal Sustainable Opportunities Class A Mac Universal Sustainable Opportunities Class F Mac Universal Sustainable Opportunities Class G Mac Universal Sustainable Opportunities Class T6 Mac Universal Sustainable Opportunities Class T8 Meritas Maximum Growth Portfolio Series A Meritas Maximum Growth Portfolio Series F PH&N Community Values Global Equity Fund Advisor PH&N Community Values Global Equity Fund Series C PH&N Community Values Global Equity Fund Series D PH&N Community Values Global Equity Fund Series F RBC Jantzi Global Equity Fund RBC Jantzi Global Equity Fund Advisor Series RBC Jantzi Global Equity Fund Series D RBC Jantzi Global Equity Fund Series F Scotia Global Climate Change Fund Scotia Global Climate Change Fund - Advisor Scotia Global Climate Change Fund Class F TD Global Sustainability Class - Advisor Series TD Global Sustainability Class - F Series TD Global Sustainability Class - Investor Series TD Global Sustainability Fund - Advisor Series TD Global Sustainability Fund - Investor Series TD Global Sustainability Fund - Series F Global Small/Mid Cap Equity BMO GDN Sustainable Climate Class Advisor Ser BMO Sustainable Climate Class Investors Summa Global Environ Leaders Class Ser A Investors Summa Global Environ Leaders Class Ser B Investors Summa Global Environ Leaders Fund Ser A Investors Summa Global Environ Leaders Fund Ser B Investors Summa Global Environ Leaders Fund Ser C Global Equity Balanced Ethical Select Global Growth Portfolio Class A Ethical Select Global Growth Portfolio Class F RBC Jantzi Balanced Fund Advisor Series RBC Jantzi Balanced Fund Series A RBC Jantzi Balanced Fund Series D RBC Jantzi Balanced Fund Series F SocieTerra Growth Plus Portfolio Global Neutral Balanced Ethical Select Global Balanced Portfolio Class A Ethical Select Global Balanced Portfolio Class F SocieTerra Growth Portfolio CCM5010, CCM5011, CCM5012 CCM5013 IGI589 IGI590 IGI587, IGI588 MFC1029, MFC1179, MFC1692, MFC2195 MFC1339 MFC2675 MFC2672, MFC3593, MFC4050 MFC2673, MFC3594, MFC4051 SRI012, SRI112, SRI512 SRI312 PHN4630, PHN6630 PHN3630 PHN630 PHN5630 RBF304 RBF213, RBF785, RBF869 RBF1045 RBF653 BNS319 BNS719, BNS819, BNS919 BNS519 TDB2361, TDB2362, TDB2363, TDB2364 TDB2365 TDB2360 TDB484, TDB485, TDB486, TDB487 TDB483 TDB488 GGF85246, GGF86246, GGF87246 BMO246, GGF70246 IGI597 IGI598 IGI593 IGI594 IGI591, IGI592 NWT022, NWT10022, NWT10122, NWT322 NWT922 RBF205, RBF783, RBF867 RBF303 RBF1044 RBF652 DJT00028 NWT021, NWT10021, NWT10321, NWT121 NWT921 DJT

32 International Equity Ethical International Equity Fund Series A Ethical International Equity Fund Series F Meritas International Equity Fund Meritas International Equity Fund Series F Miscellaneous Creststreet Alternative Energy Fund Class A Creststreet Alternative Energy Fund Class B Creststreet Alternative Energy Fund Class F Retail Venture Capital Fondaction (QC)* Fonds de solidarité FTQ* GrowthWorks Atlantic Venture Fund Balanced GrowthWorks Canadian Fund Working Opportunity Fund Balanced 1 Working Opportunity Fund Balanced 2 Working Opportunity Fund Growth 1 Working Opportunity Fund Growth 2 U.S. Equity Ethical American Multi-Strategy Fund Series A Ethical American Multi-Strategy Fund Series F Meritas U.S. Equity Fund Series F NWT075, NWT10075, NWT175, NWT275, NWT375 NWT975 SRI005, SRI105, SRI505 SRI305 CAM400 CAM401 CAM402 WVN443 WVN610 WOF888, WOF890, WOF892 WOF141, WOF142, WOF895, WOF896 WOF889, WOF891, WOF893 WOF151, WOF152 NWT063, NWT10063, NWT163, NWT263, NWT363 NWT963 SRI304 31

33 Appendix C Asset Managers who have agreed to be listed in the Report Aberdeen Asset Management Addenda Capital Inc. AGF/Acuity Funds Axiom Asset Management Baillie Gifford BNP Paribas Investment Partners Canada Cordiant Fiera Sceptre Inc Foyston, Gordon & Payne Inc. Genus Capital Management GLC Asset Management Gryphon Investment Counsel Inc. Guardian Ethical Management Ltd. Investors Group MFS McLean Budden Pictet RBC Global Asset Management Inc. SEAMARK Asset Management Ltd. 32

34 Appendix D Impact Investing Funds Community Loan Funds and Social Venture Capital Funds ACCESS Community Capital Fund Andrew Peacock Fund Canadian Alternative Investment Cooperative Canadian Youth Business Foundation Caring Capital CEDIF Centre for Social Innovation Community Bond Circle of Habondia Lending Society Clearly So, Canada Columbia Basin Trust Community Forward Fund Community Power Capital Ecotrust Canada Edmonton Community Foundation (also known as Edmonton Social Enterprise Fund) Investeco Jubilee Fund Momentum Ottawa Community Loan Fund PARO Centre for Women Renewal 2 Renewal Partners Rise Asset Development Saint John Community Loan Fund Small Business Loans Association Program Social Capital Partners Sustainable Development Technology Fund Tenacity Works Toronto Atmospheric Fund Toronto Housing Authority Women s Enterprise Centre La Siembra Private Investment Program Foundations Engaged in Impact Investing Bealight Foundation Endswell Community Foundation Illahie Foundation JW McConnell Family Foundation Muttart Foundation Real Estate Foundation of BC Somerset Foundation Vancity Community Foundation International Impact Investment Funds Oikocredit MEDA Sarona Risk Capital Fund Aboriginal Funds Alberta Indian Investment Corporation Apeetogosan (Métis) Development Inc. Atuqtuarvik Corporation Loan Services Arctic Cooperative Development Fund (ACDF) CAPE Fund Clarence Campeau Development Fund däna Näye Ventures First Nations Bank First Nations Regeneration Fund Louis Riel Capital Corporation National Aboriginal Capital Corporation Association NWT Metis Dene Development Fund Ltd Nunavut Business Credit Corporation Nunavut Equity Investment Fund Saskatchewan Indian Equity Foundation Inc. Settlement Investment Corporation Tale awtxw Aboriginal Capital Corporation Two Rivers Community Development Centre Tribal Resources Investment Corporation Ulnooweg Loans Credit Unions with Impact Investing Vehicles Alterna Assiniboine Credit Union Coast Capital Savings First Calgary Credit Union Island Savings Credit Union Ottawa Women s Credit Union Vancity 33