Title slidePresented by Brian Toller

Past Chair, Community Foundation of Ottawa

CFC Conference, Calgary, May 8, 2015

Responsible Investing

at the

Community Foundation of Ottawa

Responsible Investing Policy at CFO 2

Community Foundation of Ottawa – Snapshot

Started in 1987 with $500k from local community leaders.

Assets now just over $110 million. In 2014, provided $8.2 million in grants to more than

500 charities Since inception, have made grants in excess of $85

million, mostly to Ottawa charities. Slowly rolled out a Responsible Investing strategy with

our endowment in 2010. Based on integration of Environmental, Social &

Governance factors in investment selection.

Developing Responsible Investing Policy

Responsible Investing Policy at CFO 3

Investment Committee reluctant, fear of harming performance, moral quandary of picking the “good guys” over the “bad guys”.

This is a Board decision, education of Board is key to moving forward

RI Policy Components:Investment Core Beliefs

i) As long-term investors, we believe that responsible corporate behaviour with respect to environmental, social and governance (ESG) factors can generally have a positive influence on long-term financial performance, and that investment analysis should incorporate ESG factors to the extent that they effect risk and return.

Responsible Investing Policy at CFO 4

Responsible Investing in CFO Endowment

2) Best in Class Approach – integrating environmental, social and governance (ESG) factors in investment selection. Choosing best player rather than negative screening.

3) United Nations Principles of Responsible Investing (UNPRI). Key to getting IC on board.

4) Proxy Voting – encourages improved corporate behaviour.

ii) CFO’s mission is to nurture philanthropy and work with partners to have an enduring impact on communities. It values accountability, transparency, fairness and integrity in all of its activities. To that end, it intends to invest its assets responsibly in a way that is consistent with its mission.

UN Principles of Responsible Investment

1. Incorporate ESG issues into investment analysis and decision-making processes.

2. Be active owners and incorporate ESG issues into our ownership policies and practices.

Responsible Investing Policy at CFO 5

3. Seek appropriate disclosure on ESG issues by the entities in which we invest.

4. Promote acceptance and implementation of the Principles within the investment industry.

5. Work together to enhance our effectiveness in implementing the Principles.

6. Report on our activities and progress towards implementing the Principles.

Canadian Equities -- Bloomberg ESG Data

Responsible Investing Policy at CFO 6

• Bloomberg provides no-cost access to ESG data

ESG Disclosure Score done annually incorporating vast amount of data on ESG issues like GHG emissions, hiring practices, board independence

tracks whether company has signed on to Global Reporting Initiative (GRI), important standard

do they have a Climate Change Policy? monitors range of governance issues.

ESG Canadian Portfolio Overview

Doherty & Associates Investment Counsel

Source: Bloomberg, Doherty & Associates

ESG Scores Compared to TSX

On a cap weighted basis, all holdings are representative of best in class transparency and reporting in their respective sectors

10Doherty & Associates Investment Counsel

Responsible Investing Policy at CFO 8

Active Engagement

• By owning a company you have a say, with negative screening, you don’t.

• Doherty has a conversation with a company they are concerned about, and more are responding well.

Responsible Investing Policy at CFO 9

Examples: Crescent Point Energy – low score (11), promises

to improve in 2014 Loblaws – Joe Fresh, Bangladesh factory collapse.

They responded well, did not leave country, victim compensation, first to sign on to global declaration.

Magna and Monsanto avoided because of poor ESG.

Proxy Voting

Responsible Investing Policy at CFO 10

• Broadridge, owned by Ontario Teachers Pension Fund, offers RI option on proxy voting, on issues related to corporate governance, exececutive compensation, and social and environmental concerns.

• Data from Glass & Lewis, highly respected proxy voting service, $20 trillion AUM.

• Our votes presented to IC annually for feedback.

Global Equities

• Blackrock – not an ESG fund per se, but they are UNPRI signatories. Very active with voting and engagement with over 1,500 companies per year.

• Manning & Napier – Does not use much ESG in their investment selection. We are working on them!

• Mercer – our advisor, tracks ESG capability of 5,000 managers worldwide, ratings of 1 to 4. Blackrock and Manning & Napier both rated ESG 3. Doherty probably a 2.

Responsible Investing Policy at CFO 11

Real Estate

Responsible Investing Policy at CFO 12

• ESG 1 -- embraces ESG issues in their entire operation.

• LEED certified buildings, on-site energy generation projects, seek out transit-oriented development.

• reduced energy consumption by 2.5% across its North American portfolio in 2012.

• Consistently in top three ranking for sustainability in Global Real Estate Sustainability Benchmark (GSERB).

Current Status 2015

• Impact Investing -- June 2014 allocated $5.5 million in endowment (5%) to Mercer Sustainable Opportunities Fund.

• Work in progress, but now about 82% of our assets have some degree of ESG integration. Not harming returns – did 7.4% after fees last year, averaged 7.7% over last 4 years.

• As asset owners, we are in the driver’s seat. Our managers will listen to us.

• Aligning our assets with our mission in a cost effective way.

• Please join us! Responsible Investing Policy at CFO 13