A Commonsense approach to ESG: A conversation with Priti Shokeen, Head of ESG Research and Engagement, TDAM

Beginning her career in 2002, Priti Shokeen joined TD Asset Management Inc. (TDAM) in 2020 as the Head of the ESG Research and Engagement Team, where she works to promote sustainable investments within TDAM and throughout the industry. Priti began her career in sustainability at a United Nations agency in Geneva, Switzerland, and gained work experience within the Indian chambers of commerce and at a major global finance company as part of the ESG research, ratings and investment solutions team. Her credentials are extensive and include a BCom, with Honours, University of Delhi, an MA in Sociology, University of Warwick and a PhD in accounting and finance, Kingston Business School in England.

We recently caught up with Priti - digitally of course - to find out more about her team's investment philosophy and her thoughts on what the future may hold in the environmental, social and governance (ESG) space.

I know there must be several, but what area in ESG do you feel will add greater value in seeking long-term sustainable growing assets?

While there are four main areas we are concentrating on, proxy voting and board diversity are the two where we will be focusing our attention when looking for long-term sustainable growing assets. With proxy voting, we take our share ownership seriously and have already implemented guidelines that will systematically advance our approach to assessing ESG matters. Some of these new guidelines include recommending voting in favour of ESG proposals that seek standardized reporting on ESG issues and shareholder resolutions advocating enhanced disclosure and transparency.

We will also further promote gender diversity and have guidelines in place to help support this. For example, we will vote against all incumbent members of the nominating committee if less than 30% of the board is represented by women. Or, if there are no incumbent nominating committee members up for election or if the board does not maintain a nominating committee, we will vote against all incumbent members of the board.

How do you ensure consistency of ESG engagement across the various asset classes?

Great question. We regularly engage with companies we invest in to highlight areas of concern and/or areas of potential improvements. For example, in 2020 we engaged with 191 companies across our portfolios on various topics like board composition, aligning management compensation with shareholder returns; safety and environmental impact, climate change risk and so on.

This year, our approach will be defined by consistency of engagement across all of our asset classes and aim to engage on material ESG issues with our largest combined holdings across public and private markets. We will seek information from our portfolio companies on how their boards address material and systemic ESG risks and look to know more in regard to ESG expertise on boards.

Climate change is a huge topic right now. Do you have a focus on climate transition across the various asset classes?

This year climate action will be accelerated by regulatory development across the globe and by the expectations of significant government spending around green stimulus packages in an effort to transition to low carbon economies. For 2021, we aim to push our approach further by looking at macro sectoral effects of climate change and identifying investment risks and opportunities across different actively managed asset classes.

What is your view and approach on integrating ESG in TDAM portfolios?

Our focus on long term investment relies on sound evaluation of how a business serves current and future needs, but also how well companies are managing ESG risks directly relevant or material to their long-term financial wellbeing. This year we'll evolve our approach to ESG materiality and portfolio analysis through continued advancement of our proprietary ESG exposure scores. As well our ESG dashboard will integrate multiple independent third party ESG information sources with our proprietary work for greater consistency.

Our integrated ESG view is embedded into all of our portfolios across asset classes. While we do favour integration as providing the best prospect for influencing improvement we have also launched positively screened ESG mutual funds and ETFs for investors. In general, while highly supportive of these standards, we believe that good quality management teams are aware of key ESG risks and opportunities and communicate these transparently to their shareholders and maintain good relationships with their stakeholders.

Lastly, any noteworthy TV binge-watching in your spare time?

Stay at home orders for the past little while have provided me the opportunity to catch up on a bit of late-night binge-watching. Social Dilemma resonated significantly with me, with big tech governance being next on my areas of ESG focus.

Internationally, having been born and raised in India, I follow Indian media quite a bit and love this heartwarming series called Panchayat - which translated from Hindi to English means "Village Council".

For more information on TDAM's commonsense approach to ESG, please check out our new article Common sense approach to ESG contributes to investment excellence. Also, be sure to tune into our latest podcast.

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