Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• A Japanese industrial company committed to using refrigerants with lower environmental impact.
• A textile manufacturer reduced wastewater discharge by 35% by 2020 compared to 2015.
• Notable improvement seen in a Southeast Asian convenience store chain's reduction of plastic bag usage.

Social Achievements

• A Japanese household products company added one female independent director to its board.
• An Australian bio-tech company met global regulatory standards for plasma collection and manufacturing.
• Shenzhou International maintained a low employee turnover rate (4.06%) well below the industry average.

Governance Achievements

• Voted against management of an Australian property group on an ESOP plan not aligned with minority interests.

Climate Goals & Targets

Environmental Challenges

• Slow pace of ESG change in certain Asian countries and industries.
• High environmental risk in India (air quality and drinking water sanitation).
• Decreasing political rights and civil liberties in Asia (Freedom in the World Index).
• High corruption in Vietnam (Corruption Perceptions Index).
• Limited trust in police and endemic corruption in Malaysia (Corruption Perceptions Index).

Mitigation Strategies

• Active engagement with companies to improve ESG practices (board diversity, environmental impact, safety).
• Incorporating ESG factors into the investment process for robust risk assessment.
• Utilizing third-party ESG data sources (MSCI, Sustainalytics, GMT Research) and on-the-ground channel checks.
• Proxy voting to influence company decisions.
• Focusing on risk mitigation by avoiding companies with unsustainable trajectories.

Supply Chain Management

Responsible Procurement

• Working with a handful of Tier 1 suppliers to improve transparency and standards.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN PRI

Sustainable Products & Innovation

• Recycled polyester footwear produced by Shenzhou International

Environmental Metrics

ESG Focus Areas

• Climate Change
• Responsible Investment
• Biodiversity

Environmental Achievements

• Provided climate-related metrics for 74% (US$287.0 billion) of RBC GAM’s total AUM, as at December 31, 2022. This represents 93% of equity holdings and 73% of fixed income holdings.
• 35% (US$78.3 billion) of equity and corporate fixed income investments are in issuers with verified or committed science-based targets (based on SBTi targets), and 76% (US$172.0 billion) in issuers with any climate target (includes verified and committed SBTi targets, and other climate targets).
• Maintained carbon neutrality in global operations.

Social Achievements

• 1,800+ ESG-related engagements that focused on various ESG factors, including climate change.

Governance Achievements

• Expanded internal ESG data infrastructure to further enable and enhance the use of ESG data as part of the investment process.
• Published third annual report aligned to the recommendations of the TCFD.

Climate Goals & Targets

Environmental Challenges

• Challenges with data coverage, data standardization, transparency, data accessibility, and data relevance to decision-making regarding nature-related risks.
• Limitations in data availability, inapplicability of methodologies, and/or minor financial materiality to the overall AUM for certain asset classes.
• Challenges in the quality and consistency of scope 3 emissions estimation methodologies, and concerns regarding double-counting of emissions when aggregating emissions at a portfolio level.

Mitigation Strategies

• Continued to build knowledge and understanding of the potential material risks that nature loss, and biodiversity loss specifically, may pose.
• Continued to work collaboratively with other investors on nature-related issues through industry initiatives, and to engage with issuers on this topic, where relevant.
• Focus on using reported emissions data, calculated in line with the GHG Protocol, and collected from a verified third-party data provider. Where reported data is not available, use estimated data.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Shifts in climate patterns

Transition Risks

• Government policies and regulations
• Litigation claims
• Technology disruption
• Market shifts
• Reputation risks

Opportunities

• Resource efficiency
• Low-carbon energy sourcing
• Development of new products and services
• Access to new markets and customers
• Business resilience

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Governance
• Climate change and nature
• Human rights

Climate Goals & Targets

Environmental Challenges

• Climate change and nature-related risks
• Human rights risks in supply chains and operations

Mitigation Strategies

• Measuring, monitoring, and reporting on carbon emissions and net-zero alignment
• Engaging with significant GHG emitters
• Developing and implementing plans to actively engage with issuers not effectively managing climate-related risks
• Implementing mechanisms to identify affected stakeholders and address potential or actual adverse human rights impacts

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts
• Asset stranding risk

Reporting Standards

Frameworks Used: TCFD, TNFD, UN PRI