Responsible Investment
At Foyston, Gordon & Payne, we integrate Environmental, Social, and Governance (ESG) factors into our investment decisions to drive long-term value and mitigate risks. Our commitment to responsible investing is embedded in our fundamental investment approach, ensuring that we manage risks relevant to each company we invest in.
ESG Integration in Investment Decisions
We actively engage with the companies in our portfolios, emphasizing the importance of ESG practices. As a signatory to the Principles for Responsible Investment (PRI), we have high expectations for corporate governance, environmental and social responsibility.
In 2023, we continued to monitor and engage with management teams. Our engagement activity is based on the sector, industry, region, and impact.
Some of our engagements with management have led to formal targets being set. Please see below for some examples.
| Company | Engagement | Outcome |
| Company #1 | Commitment to net zero by 2050 and tenure limits for board members | Adopted net zero commitment and set 2020 GHG targets |
| Company #2 | Adoption of gender targets for board diversity | Integrated gender diversity targets into the corporate charter |
| Company #3 | Interim GHG reduction goals | Formalized GHG reduction targets |
Proxy Voting Against Management
In 2023, we voted against several management proposals to align with our responsible investment principles. This ensures that our portfolios consist of well-governed companies that are aligned with our ESG goals.
While our ESG analysis is an important part of our investment decision-making process, it does not necessarily eliminate a company from being considered for a portfolio. We can have more impact and influence on a company’s policies and procedures as equity owners and debt holders than if we exclude them from the portfolio. However, for those clients that have specific restrictions and requirements, we do manage customized portfolios that exclude certain companies for ESG reasons.
PRI Performance
The PRI recently recognized Foyston, Gordon & Payne’s responsible investment approach, scoring us above the median of our peers across multiple modules.
Helping Investors Reduce Their Carbon Footprint
Addressing Climate Change
Understanding Carbon Intensity
Carbon intensity is generally divided into Scopes 1, 2, and 3:
- Scope 1: Direct emissions from company operations.
- Scope 2: Indirect emissions from purchased energy.
- Scope 3: Indirect emissions from supply chains and product use.
The Importance of WACI
Weighted Average Carbon Intensity (WACI) measures the carbon intensity of an investment portfolio by weighting each company’s carbon intensity by its proportion in the portfolio. It helps us compare portfolio emissions against benchmarks, guiding our efforts to lower carbon footprints across investments.
Our Impact
By actively engaging with companies, particularly in the energy sector, Foyston, Gordon & Payne’s portfolios consistently achieve lower WACI than their benchmarks, demonstrating our commitment to reducing carbon emissions.
| Pooled Fund | Weighted average carbon intensity (WACI) compared with benchmark's WACI |
| FGP Global Equity Fund | 79% lower |
| FGP Global Smaller Companies Fund | 69% lower |
| FGP International Equity Fund | 74% lower |
| FGP Canadian Ex-Energy Equity Fund | 71% lower |
| FGP Canadian Equity Fund | 17% lower |