At Guardian Capital LP (Guardian Capital), our core objective is to enhance long-term
investment performance for our clients. An integral part of achieving this goal is our
commitment to invest in companies that we believe are capable of generating
long-term, sustainable growth.
We believe that investee companies are best positioned to achieve long-term, sustainable growth when they:
Engage in sustainable environmental practices
Consider the effects of their operations on clients, employees and communities
Have proper governance practices that protect the interests of all stakeholders
Environmental, social, and governance (ESG) considerations are integrated into all of our investment processes and stewardship activities, which is commonly referred to as ESG Integration and Active Ownership, respectively.
At Guardian Capital, ESG Integration occurs through our proprietary research processes and the analytical skills of our investment teams. Our investment teams utilize proprietary frameworks to assess material ESG factors in determining the longterm sustainability of the underlying company and the impact ESG factors are likely to have on its outlook and valuation.
STEWARDSHIP AND ACTIVE OWNERSHIP
Our role as an active steward of capital is an important part of our fiduciary duty. Active Ownership practices, including corporate Engagement and Proxy Voting, are a core aspect of Guardian Capital’s stewardship approach. For more details, see Our Approach to Stewardship document.
Discussions with companies often yield valuable insight into their business strategy, views and approach while providing an avenue for our investment teams to encourage companies to improve their sustainability practices.
When voting proxies for the companies we invest in, Guardian Capital investment teams take into consideration the investee company’s governance structure, commitment to sustainable environmental practices and consideration of social policies that foster the well-being of all stakeholders.
The implementation is unique to each investment team and each investment strategy. In the same way that there is no “one size fits all” for investing, there is no “one size fits all” for determining how ESG factors are considered in the investment process by each investment team at Guardian Capital.
SPECIALIZED RESPONSIBLE INVESTING PRODUCTS
ESG considerations are integrated into all of our investment processes and stewardship activities. For investors looking for more specialized Responsible Investing approaches, Guardian Capital also offers:
Guardian Capital’s Sustainable Funds are a fund-of-funds that apply ESG oversight by objectively
screening each of the underlying funds based on sustainability thresholds, as measured by
Morningstar® Sustainability Ratings™.1 2
Learn more about our Sustainable Funds
Guardian Capital offers a carbon-constrained version3 of our Guardian Canadian Equity strategy. The strategy applies careful consideration in eliminating companies based on energy production, fossil fuel distribution and other factors.
Our Guardian Ethical Management (GEM)4 Pools utilize Negative ESG Screening in conjunction with an
extensive Active Ownership program through their ESG partner, Northwest & Ethical Investments LP.5
Learn more about GEM
2 The Morningstar® Sustainability Rating™ is a ranking of a fund’s ESG risks relative to that fund’s Morningstar Global Category peers, and is updated monthly. It provides a measure of how well the issuing companies of the securities within a fund’s portfolio are managing their financially material ESG risks. The Morningstar Sustainability Rating is depicted by globe icons where 5 globes equals High ranking (lower ESG risk) and 1 globe equals Low ranking (higher ESG risk) compared to category peers. A higher Sustainability Rating represents lower ESG risk relative to a fund's peer group. The Morningstar Sustainability Rating is calculated from the combined proportional Portfolio Corporate Sustainability Rating and Portfolio Sovereign Sustainability Rating, for the trailing 12 months on long-only positions. A Morningstar Sustainability Rating is assigned to any fund that has either or both a Corporate and Sovereign Portfolio Sustainability Score™, and which requires i) that at least 67% of the fund's underlying assets are Qualified Holdings that are eligible to be rated and ii) is within a Morningstar Global Category with at least 30 scored funds; therefore, the rating is not limited to funds with explicit sustainable or responsible investment mandates. Excluded from Qualified Holdings are short positions, cash and currency, derivatives and synthetic holdings; similarly, municipal bonds, commodities, real estate, and alternative investment types are not considered corporate or sovereign and are not currently eligible to contribute toward the overall rating. Morningstar Sustainability Ratings and scores are portfolio-based, not performance-based. They do not reflect a fund’s performance on either an absolute or risk-adjusted basis, nor are they a qualitative Morningstar evaluation of a fund’s merits and should not be the sole basis for an investment decision. A fund’s Morningstar Sustainability ratings, rankings and scores evaluate the ESG aspects of the fund’s portfolio holdings and do not evaluate the efficacy of the fund’s ESG investment strategies and are not indicative of how well ESG considerations are integrated by a fund. The full rating methodology employed by Morningstar can be found on their website or by clicking on the following link: Morningstar Sustainability Rating for Fund Methodology.
3 The Canadian Equity Carbon Constrained strategy is currently only offered as a segregated account mandate.
4 GEM Pools are a private offerings available to qualified investors only.
5 Northwest & Ethical Investments LP (NEI) provides the Environmental, Social, and Governance (ESG) screening and engagement while Guardian Capital LP provides the investment fund management portfolio.
Guardian Capital LP is a signatory of the United Nations-supported Principles of Responsible Investment (UN PRI). The UN PRI does not prescribe the exclusion of any particular type of company or industry; rather it requires that, as the Manager, we are informed on the ESG issues, and that we are comfortable with the activities and practices of the companies that we invest in. Guardian’s approach to responsible investing is consistent with the framework provided by the UN PRI. Our Responsible Investing policies are publicly available on our website above.
Responsible investing is an approach to investing that incorporates ESG considerations into investment decisions. This approach may incorporate considerations beyond traditional financial information into the investment selection process, which could result in investment performance deviating from other products with comparable objectives or from broad market benchmarks.
Guardian’s Sustainable Funds and GEM Pools have ESG-related investment objectives, while other Guardian Mutual Funds and ETFs do not have ESG-related investment objectives. All Guardian Funds integrate ESG considerations into the investment analysis of all holdings within their respective portfolio. A Fund’s ESG characteristics and performance may change from time to time. Please review the Fund’s prospectus for details on how the Fund’s investment strategy incorporates responsible investing considerations and the associated risks, and consult your financial professional prior to investing.