Inhance Investment Management Inc. is calling on the Canadian Securities Administrators to develop policies encouraging income trusts to provide greater disclosure on environmental, social and governance risks.

“Income trusts have become a popular investment for the average Canadian’s portfolio,” said Dermot Foley, vice president, strategic analysis for Vancouver-based Inhance. “Because of this, it is even more important for investment managers and advisors to have full disclosure on each trust’s risk profile.”

In May, over 60 institutional investment managers accounting for over $5 trillion in assets endorsed the United Nations Principles for Responsible Investment. These principles encourage fund managers to incorporate ESG analysis into investment decisions and to engage companies on ESG risk management and disclosure.

As a fund manager who endorses the UN Principles, Inhance is encouraging companies to disclose how they are managing emerging and existing ESG risks and to include this information in appropriate regulatory filings. However, rights to advocate for such disclosure are limited as unitholders of a trust as compared with rights as shareholders of a company.

“We believe that higher levels of disclosure would provide investors with additional tools to assist them in making informed decisions concerning the long-term value of their investments,” said Foley. “By utilizing the existing disclosure channels, information would be efficiently produced and equitably distributed.”