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ESG statement

Is ESG integrated into your investment process? How? Which funds or does this apply to the entire firm?

Yes, BMO Global Asset Management manages over 125 strategies globally across a range of asset classes and integrates ESG factors across the vast majority of these. We engage and vote on companies held within all our funds as well as incorporating ESG assessment into our investment analysis. In addition, we actively engage with the counterparties with whom our investment desks trade to ensure they do, or are actively making efforts to, meet our expectations for ESG considerations. We have been working to develop our range of responsible investment products and services for over 35 years, since launching Europe’s first ethically screened pooled fund in 1984. These include the award-winning Responsible Fund range – a mix of equity and fixed income strategies with some ethical and sustainability criteria, some thematic funds including Sustainable Opportunities Global Equity, ESG segregated mandates and our Responsible Engagement Overlay service, reo®, which last year marked its 20th anniversary and today covers over £250 billion in external assets under advice.

We ultimately take a tailored approach to ESG integration, depending on the nuances of each asset class. Our approach to integration is fund manager-led and based on identifying material ESG issues as part of the standard investment process.

We continuously seek to strengthen the feedback loop between ESG information and knowledge gained through active ownership activities (i.e. engagement and voting) and our main ESG integration databases and decision-making processes. We aim to achieve this by conducting regular cross-team meetings and presentations on relevant ESG issues; sharing active ownership data across platforms that is accessible to investment teams; encouraging analysts and portfolio managers to address ESG issues in their company meetings; and closely involving investment teams when exercising our right to vote at shareholders’ meetings and designing engagement programmes.

Who conducts ESG analysis within the team? Is it done by PM, financial analysts or a central ESG team?

We have a dedicated in-house Responsible Investment (RI) team, one of the largest and most experienced teams of its kind. The award-winning 22-member team acts as the global centre of excellence on ESG issues at BMO GAM, supporting all areas of responsible investment activity. The team’s core activities are conducting ESG analysis, corporate engagement and proxy voting.

The RI team has extensive experience gained in financial services, charities, the media, consultancy, public policy and industry and were recognised by Investment Week as the “Best ESG Research Team” in 2018, 2019 and 2020 (at the Sustainable & ESG Investment Awards).

The RI team forms part of the Investment Management department (reporting into our CIO) as we believe the monitoring and analysis of ESG data is a core part of investment processes across our business.

Research analysts and portfolio managers within our fund management teams also conduct their own ESG analysis within their fundamental analysis. They have access to an extensive range of ESG data and research as well as support in interpreting this information, provided by the specialist RI team. This analysis informs asset allocation, stock selection, portfolio construction and shareholder engagement and voting.

Please summarise the key ESG metrics that are core to your strategy?

We take responsible investment seriously. The identification of financially material ESG issues forms part of our investment process, helping us to manage risk and support long-term returns. Our approach to ESG is structured around seven broad themes:

  • Environmental stewardship
  • Climate change
  • Human rights
  • Labour standards
  • Business conduct
  • Public health
  • Corporate governance

In encouraging companies to move towards best practice in managing ESG issues, we make reference to international codes and standards where relevant, such as the International Labour Organization Core Conventions, UN Guiding Principles on Business and Human Rights, the UN Global Compact, and national corporate governance principles and codes of best practice. However, any such standards are often only a starting point, as we tailor our engagement to individual companies and to how the ESG issues under discussion apply to their specific circumstances.

Our sector experts in the Responsible Investment team have developed ESG industry reports, laying out their own views on which issues are the most material on an industry by industry basis. These views are used as a basis for designing engagement projects and approaches. We believe that a key factor for engagement success is to put ESG issues into a broader business context and to explain to companies why addressing these issues can help to underpin long-term financial performance.

For our responsibly screened fund range, where the investment universe is defined by ESG criteria, our approach is based on three key concepts: invest; avoid and improve:

  • Avoid investments in companies with activities that harm society or the environment;
  • Invest in companies that demonstrate responsible business practices, and support those whose activities make a positive contribution to society and the environment; and
  • Improve: use influence as an investor to encourage companies in their efforts to improve their management of ethical and ESG issues through engagement and voting

How is this research carried out? Positive/negative screening? Qualitative?

In addition to our in-house team we use a range of ESG data providers including MSCI ESG and Institutional Shareholder Services (ISS). MSCI ESG is our primary source for ESG data and analysis and is used to systematically screen client portfolios for ESG risks, identify priority companies for engagement and to inform company analysis. ISS supplies us with custom research based on our own in-house corporate governance guidelines (which are updated annually based on country-specific best practice standards). Research provided by ISS is used to inform our vote execution as well as company engagement.

Whilst we believe that the quality of ESG data has improved markedly over the past decade, methodologies still appear to be rigid, backward looking and face difficulties to account for company specific circumstances. As a result, we use ESG research providers as a starting point in our analysis, but make sure that our investment desks in collaboration with our ESG experts in the Responsible Investment team verify and complete the data with additional information gathered through engagement, participation in industry groups and multiple research providers. We believe that using multiple sources depending on their strength (e.g. ISS for Governance, MSCI for Environment and Social data) is the best way to overcome some of the quality and coverage issues in the ESG data market.

Ethical screening is carried out on all of our responsible product range. We have two sets of criteria, one that applies to our UK and global strategies and another set for our emerging market strategies, which is detailed in our Responsible Investment Strategies Summary Criteria, available on our website:

How do you measure your success regarding ESG? Performance against benchmarks (which ones)? Reports?

We measure and report the success of engagements through “milestones”, which recognise improvements in company ESG policy, management systems or practices. They seek to capture the narrative around materiality and impact of the progress made by the company. Milestones are measured using a three-star rating system, with three stars indicating the most significant impact of the milestone on investor value, and one star reflecting smaller changes that nevertheless will contribute to investor value over the long term. We achieved 313 milestones for our clients in 2019.

Annual Responsible Investment Review
Our Responsible Investment Review is an annual report which reviews in detail all of our responsible investment activities and achievements over the year. This report can be found on our website:

Impact Reports
We see a key current trend as identifying and reporting on impact, and publish annual Impact Reports for our responsibly-screened funds.

We publish 10-15 ‘Viewpoint’ publications per year. Some of these are confidential and for our reo® clients only and some public. Subjects include outcomes of engagement projects and initiatives.

Is your business a signatory to PRI? Why, why not?

Yes, BMO Global Asset Management is a founding signatory to the UN Principles for Responsible Investment (UN PRI) and has been committed since the launch of UN PRI in 2006. The 2020 framework marked our fifth unified UN PRI Transparency Report, jointly encompassing our operations in North America and Europe. We are proud to have achieved the maximum rating of A+ for our overall Strategy and Governance.

Are you disclosing climate change policies in line with the Task Force on Climate-Related Financial Disclosures (TFCD)? Please briefly outline your policies.

Yes. We recognise that we can play an important role in supporting the transition to a lower carbon global economy, and that climate change presents both risks and opportunities that can affect our business. BMO Financial Group (BMO FG) – comprising the Bank of Montreal and its subsidiaries – became a supporter of the Task Force on Climate-related Financial Disclosures (TCFD) in January 2018, and this commitment covers all business entities, including BMO Global Asset Management.

BMO FG publicly reports on its environmental and social performance and targets in its annual Sustainability Report and Public Accountability Statement (PAS). In 2019 this included a stand-alone Climate Change Report detailing BMO FG’s approach to climate-related risks and opportunities in line with the TCFD recommendations. BMO FG also reports to the Carbon Disclosure Project.

Has your business signed up or committed to any other campaigns relating to ESG?

Please see below a list of initiatives and organizations that we are members of. We also work collaboratively with other investors and NGOs (e.g. Access to Nutrition foundation, Global Witness, Access to Medicines foundation) on an issue-by-issue basis.

  • Global Impact Investing Network
  • ICCR – Interfaith Center on Corporate Responsibility
  • Investor Alliance on Human Rights
  • Platform Living Wage Financials
  • Climate Action 100+
  • UN Principles for Responsible Investment (UN PRI)
  • Carbon Disclosure Project (CDP)
  • Institutional Investors Group on Climate Change (IIGCC)
  • Global Network Initiative (GNI)
  • Eumedion
  • International Corporate Governance Network (ICGN)
  • Asian Corporate Governance Association (ACGA)
  • Global Investor Governance Network (GIGN)
  • Council of Institutional Investors (CII)
  • The UK Sustainable Investment & Finance Association (UKSIF)
  • Investor Forum
  • Responsible Investment Association (RIA)
  • Corporate Governance Advisory Committee (QCA)
  • 30% Club
  • Investment Association

In addition, BMO is dedicated to finding creative and data-driven ways to minimize the environmental impact of our operational activities, and a key milestone on our journey was achieving carbon neutrality in 2010. BMO also has a commitment to giving back to communities through a variety of initiatives at hundreds of charitable organizations, globally.



All information provided by BMO Global Asset Management within this document is provided for the attention of the addressee only for the purpose solely of evaluating the investment management services that are available from BMO Global Asset Management. The information is provided by BMO Global Asset Management on the basis that it remains private and confidential between BMO Global Asset Management and the addressee. Accordingly, the addressee is not permitted, in the event that a request for information is made under the Freedom of Information Act 2000, to disclose any of the information provided herein by BMO Global Asset Management, given the duty of confidentiality that exists as between BMO Global Asset Management and the addressee.


This document is issued by BMO Global Asset Management, a trading name of BMO Asset Management Limited. In the event that you decide that you wish to receive the services detailed within this document, your contractual agreement would also be with BMO Asset Management Limited.

Compliance No: CM022203


A part of the Mark Allen Group.