Statement of investment beliefs
The primary purpose of the Green Municipal Fund (GMF) is to help municipal governments leverage investments in sustainability projects, and to provide financing in the form of grants, loans and guarantees to eligible recipients for eligible projects. The investment strategy of GMF is guided by the values reflected in this statement of investment beliefs and is designed to meet GMF funding objectives.
We aim to remain financially sustainable through superior returns and prudent cash flow management and to help support the required endowment while actively exploring sustainable investment opportunities, in keeping with the mandate of the fund. In line with our objective of capital preservation, we have a low to moderate risk tolerance.
Our investment time horizon is determined by cash flow expectations for our program objectives.
We believe that environmental, social, and corporate governance (ESG) issues should be important factors in making investment decisions.
We seek to take risk prudently and to make decisions that enhance the sustainability of the fund. However, we acknowledge that some of our investment decisions will not succeed.
We will diversify our investments by geography, investment manager, investment style and asset class to ensure that risk is spread throughout the portfolio, to mitigate the impact of any single investment loss on the overall portfolio.
It is the responsibility of FCM to manage the GMF investment portfolio.
Sustainable investment objectives
We strive toward the integration of environmental, social and corporate governance (ESG) considerations into our investment management processes because of GMF’s environmental and social mission, and because of our belief that consideration of these factors can contribute to superior risk-adjusted returns over the long term.
The loans and grants offered by GMF are sustainable investments.
The meaningful integration of ESG factors within the investment process is a key criterion in the selection of external investment managers. Emphasis is given to investment firms and teams with a sustainable investment policy, which formalizes ESG integration and with the capabilities to operationalize said policy. We will hold our managers accountable to their sustainable investment policies through engagement, reporting and monitoring.
We will strive to invest in assets that have the potential to result in significant environmental improvement on air, water and soil quality, address climate change adaptation and/or reduce greenhouse gas emissions. In addition to the potential environmental benefits, we will strive to invest in assets that provide potential economic and/or social benefits such as:
- protecting of human health;
- supporting community economic development;
- improving community quality of life;
- protecting natural assets and biodiversity;
- advancing principles of anti-racism, equity, and inclusion; and/or
- advancing reconciliation and environmental justice.