MFS Investment Management1 believes that the best approach is the first approach: promoting sustainability within a corporation.
Before selecting securities for a fund, MFS integrates ESG factors into their investment research. Embedding ESG factors helps MFS understand and manage any company-specific risks and opportunities within the portfolios.
MFS has also developed a comprehensive ESG training program to strengthen expertise on sustainable investing topics across the firm. The goal? Empower and encourage its employees to incorporate sustainability issues into all facets of their work.
MFS produces company-specific, sectoral and thematic ESG research, which helps the investment management teams make better decisions on behalf of investors. MFS also engages with the organizations in which they invest to advance relevant sustainability issues. This engagement may take the form of:
- encouraging greater disclosure and transparency,
- seeking management support of sustainability and/or greater accountability,
- exercising voting rights in support of sustainability initiatives.
With this focus on engagement, MFS has encouraged companies to take action. For example, MFS has prompted companies to reduce greenhouse gas emissions and their overall environmental impact. This is particularly true in relation to fossil fuel companies.
Already in 2021, MFS used its proxy voting rights to support the election of an activist hedge fund’s nominees to an oil company’s board. This hedge fund had raised concerns about the performance, strategy and board composition at the multinational. The critique centred on poor capital allocation and a lack of board preparedness for an energy transition.
MFS had long viewed the company's actions as insufficient to manage its climate transition risks. After much consideration, MFS and other large institutional investors agreed that voting in favour of the hedge fund’s four nominees was necessary to increase the board’s overall level of awareness of and experience in renewable technologies. As a result of this historic vote, three of the four dissident candidates were elected to the oil company's board of directors.
Since then, MFS engaged with several companies through Climate Action 100+, encouraging them to adopt best practices such as setting science-based emissions reduction targets and enhancing their ESG disclosures.
MFS's sustainability efforts don't stop there. Here are a few more highlights:
- MFS is a signatory to:
- the United Nations Principles for Responsible Investment (PRI),
- the CFA Institute Diversity, Equity, and Inclusion Code (USA and Canada) (the "DEI Code") and
- the CEO Action for Diversity & InclusionTM pledge;
- MFS participates in and is an investor member of the Climate Action 100+ group;
- MFS is a supporter of the FAIRR Initiative’s investor network since 2021;
- MFS appointed a Chief Diversity, Equity and Inclusion Officer. This newly created position is responsible for enhancing MFS’ efforts to become a more diverse, equitable and inclusive workplace.
1MFS Investment Management Canada Limited is the sub-advisor to the Sun Life MFS Funds; SLGI Asset Management Inc. is the registered portfolio manager. MFS Investment Management Canada Limited has appointed MFS Institutional Advisors, Inc. to provide additional sub-advisory services.
Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any mutual funds managed by SLGI Asset Management Inc. or sub-advised by MFS Investment Management. These views are subject to change and are not to be considered as investment advice nor should they be considered a recommendation to buy or sell.
The information provided is not intended to be investment advice. Investors should consult their own professional advisor for specific investment and/or tax advice tailored to their needs when planning to implement an investment strategy to ensure that individual circumstances are considered properly, and action is taken based on the latest available information.