Oversight of our ESG framework is part of the mandate of our Board of Directors’ Corporate Governance and Nominating Committee (CGNC). The CGNC reviews the progress made on our sustainability strategy and stays informed of ESG trends, risks, and opportunities through management engagement and reporting. As of February 28, 2023, members of the CGNC include the Chair of the Board and six other independent Board members.
Given the importance of sustainability to Manulife and the Board’s role in overseeing Manulife’s ESG framework, we ensure our Board members have a fundamental understanding of ESG matters and have the skillsets to address critical ESG issues. Board members gain experience through ongoing education sessions and reports on ESG strategy, trends, risks, and opportunities and all members are encouraged to attend sessions on ESG matters at meetings of the CGNC. Internal sustainability experts and external consultants who are subject matter experts upskill and educate our Board on current and emerging issues, topics and regulations that are relevant to our business and operations.
The CGNC’s oversight of our ESG framework complements the work of the Executive Sustainability Council (ESC). The ESC consists of our Global Chief Sustainability Officer (CSO) along with nine members of our Executive Leadership Team (ELT), including our Chief Executive Officer (CEO). The Chair position, currently held by our Global Chief Marketing Officer, is held on a two-year rotational basis. The ESC meets monthly and is responsible for establishing the enterprise’s sustainability ambition, guiding the development and execution of the sustainability strategy, and providing recommendations and direction on matters related to ESG. In addition to the ESC, we have business segment level committees that execute asset-class-specific sustainability objectives.
The CSO chairs Manulife’s ESG Centre of Expertise (CoE), which consists of corporate function and business unit sustainability leads tasked with integrating sustainability into our business practices. This group’s responsibilities include leading the development and implementation of the sustainability strategy. Additionally, the CoE ensures integration of sustainability into business unit strategies, policies, and procedures. The CoE also shares information, builds knowledge across functions and business units, advises on sustainability matters, and provides support and capacity building to business units.
Manulife’s ESG Leaders Group consists of senior leaders from multiple businesses and functional areas who are accountable for driving change and progress on our Impact Agenda and broader ESG performance. This body meets monthly to discuss the implementation of new practices and emerging industry trends.
Manulife’s Global Climate Change Taskforce consists of representatives from multiple businesses and functional areas. It drives the development of the climate strategy, risk management activities on climate-related matters, performance tracking, and disclosures. The Climate Change Taskforce supports execution of Manulife’s Climate Action Plan and includes business segment representation.
Partnership and Engagements
To continue our work to protect and preserve the environment, support health and well-being, and drive inclusive economic opportunity in the communities where we live and work, we collaborate with other like-minded organizations that feel passionately about our causes. Our strategy is to work together with those from diverse backgrounds and in different industries. It is a well-rounded approach that checks off proactive milestones, so we are all held accountable in our journey towards a sustainable future.
Climate Action 100+
Sustainable Finance Action Council
Task Force on Climate-related Financial Disclosures (TCFD)
Manulife will not knowingly make direct investments in companies that manufacture cluster munitions where we have discretion to do so. This policy applies to policyholder funds (Manulife’s “General Account” funds) and third-party client funds of Manulife Investment Management. This policy does not apply to investments where we do not have investment discretion such as index investments, unaffiliated fund mandates and client-directed managed accounts.
Manulife uses an independent third party to maintain an exclusion list of companies that manufacture cluster munitions. The exclusion list is updated on a quarterly basis.
Materiality
Materiality Assessment and Stakeholder Engagement
In 2019, we conducted a materiality assessment to deepen our understanding of stakeholders’ expectations regarding Manulife’s sustainability strategy and performance. We continue to assess the relevancy of the material topics identified with our key stakeholders on an annual basis. Their feedback affirms that we are on the right track and continues to provide insight into how we can actively address key topics through our business and operations. See our ESG Report for the updated mapping of material topics.
The following table identifies our key stakeholder groups, how we typically engage with them, and their primary topics of interest, as identified through the materiality assessment and our ongoing stakeholder interactions.
Stakeholder group
Ways we engage
Consumers/
customers
Net Promoter System
In-person working sessions
Human-centred design
Call centres
Financial services professionals
Employees
Annual global employee engagement survey
Annual mid-year engagement action check-in survey
AskHR – Online HR resource
MFCentral – global employee intranet and resource centre
Ongoing polling and surveys and Voice of the Employee (VOTE) group polling and testing
Executive led Town Halls and Ask Me Anything sessions
Diversity, Equity, and Inclusion Council
Diversity, Equity, and Inclusion events
Employee resource groups
Online internal community forums
Fuel Up Fridays – afternoon of second Friday on each month is dedicated to learning
Wellness events and webinars
Podium – online recognition platform
Pursuit – online learning platform
Newsletter for leaders
Special in-person Events – celebrations and social events at our different office locations
Speaker Series – virtual and in-person live events with external experts
MFTVs – TV screens at our major locations
Shareholders/
investors
Shareholder engagement
Annual meeting
Investor events and presentations
Investor Day
Webcasts
Investor Relations website
Annual Report and Management Information Circular
Meetings, phone calls, and e-mail correspondence
Quarterly earnings results and earnings calls
Regulators
Mandatory local and regional reporting requirements
Voluntary reporting and engagement on key issues
Questionnaires
Industry associations
Engagement with and through industry associations to work on key issues
Questionnaires for industry research
Receive updates from industry associations
Participate on committees and working groups
Civil society/
NGOs
Ongoing dialogue with local and regional non-governmental organizations
Partnerships
Industry working groups
Funding research projects
Conferences and forums
Suppliers/
Vendors
Digitization strategy
Supplier diversity program
RFX: Requests for Proposals, Information, and Quotes
One-on-one meetings
Supplier events and forums
Communities
Philanthropic partnerships
Sponsorship of community events
Volunteerism
Our Operations
Real estate: We take action to minimize our operational footprint to lessen our environmental impact and reduce operating costs — helping prepare our business for a sustainable path forward. As the transition to a net zero economy advances, investors and regulators are striving to manage the built environment as efficiently as possible to reduce emissions and meet global climate goals. Across the global Manulife Investment Management Real Estate portfolio, we have energy reduction targets, as well as targets for water use, waste diversion, and GHG emissions reduction.
Forest and farms: Manulife Investment Management Timberland and Agriculture is focused on managing forests for positive climate impact. The responsible stewardship and management of our forests and farms contributes to our climate goals. Natural climate solutions (NCS) are critical to climate change mitigation and use nature’s climate benefits to address the global warming imperative.Through our plants and soil, Manulife’s terrestrial ecosystems absorb and store more greenhouse gases than our operations emit on an annual basis. Manulife Investment Management-managed forests and farms can also be a source of emissions, through aspects such as fuel combustion to operate heavy machinery, application of fertilizers, and powering of processing facilities. Focusing on climate impacts means going beyond carbon removal and actively working to identify new opportunities for abatement of absolute emissions in our forestry and farmland operations.
In our timberland operations, we continue to manage 100% of our global forests to achieve independent third-party sustainability certification under the Sustainable Forestry Initiative® (SFI®) and/or Forest Stewardship Council® (FSC®). We've been managing our forests to these rigorous programs—which are essentially ESG standards for forest management—long before the concept of sustainable investing became mainstream. These programs address considerations from biodiversity to water, forest health to conservation value, and indigenous peoples’ rights to training and education.
We take a similar approach in our agriculture operations. We were an early mover in third-party forest certification and have managed third-party certified timberland investments for over two decades. In 2017, we began collaborating with leading environmental organizations and farmland owners and managers to build such a standard. The Leading Harvest Farmland Management Standard is now growing rapidly. In 2021, our agriculture business became the first to have our entire U.S. agriculture platform certified under the standard. As Leading Harvest expands to other countries where we operate, we intend to seek certification in Australia, Canada, and Chile as well, addressing considerations from biodiversity to water, soil health to conservation value, and indigenous peoples’ rights to training and education.
Occupied corporate real estate: We take action to minimize our Corporate Real Estate operational footprint by continuous evaluation of space requirements by the business segments and reduce operating costs by informing our businesses on how to best utilize space for a sustainable path forward
Green leases: Where we occupy leased properties, we can influence our landlords to green their spaces. We incorporate sustainability into our leased space selection process. This enables us to choose the best performing properties and open a dialogue with prospective landlords on how we can collaborate to achieve environmental outcomes.
Energy efficient design: Our workplaces are in a continuous state of improvement. Energy efficient design is an important principal in the development and implementation of major projects in buildings where our employees work. During building fit out or retrofit we require contractors to pursue construction practices and material which are environmentally friendly.
For an overview of Manulife’s Climate Action Plan, please visit Climate change.
Our Investments
Managing our own portfolio of investments: Manulife’s General Account (General Account) consists of our company’s own assets, which largely support our policyholder liabilities in Canada, the United States, and Asia. We believe that in order to deliver strong risk-adjusted returns, we must consider ESG-related risks and opportunities in our investment process.
We invest substantial capital in both public and private markets, and as such, we believe we can play a critical role as an enabler of the transition to net zero.
We have committed to steer our portfolio to net zero investment by 2050 and are in the process of setting short-term emissions targets
We continue to work to grow our portfolio of green investments, such as renewable energy and energy-efficient real estate
Integrating ESG into investment decisions: The General Account maintains its own ESG Governance and has developed ESG Investment Guidelines for its investment mandates, which include requirements to:
Consider and screen ESG risks and opportunities material to specific investments and assess their relevance
Monitor material ESG factors at the issuer level as part of ongoing investment surveillance
Discuss material ESG risks in investment reviews and approval materials
These guidelines are complemented by several additional policies that contribute to the General Account’s overall risk management and governance structure with respect to its investment activity, such as the General Account’s Environmental Risk Policy, Anti-Money Laundering and Anti-Terrorist Financing Policy, Code of Business Conduct and Ethics and the Global Reputation Risk Policy.
For an overview of Manulife’s Climate Action Plan, please visit Climate change.
Our Products and Services
As a global life insurer, we understand the connection between our environment and human health. As an investment manager, we are in a position to build dedicated investment strategies that address the issues of climate change and offer nature-based solutions to mitigate climate change through forests and farms. We are accelerating the pace of innovation around developing products that both solve customer needs and help create a more sustainable future.
Where appropriate, we are collaborating with asset management peers on key issues, including climate, and are demonstrating asset manager support for responsible investment
We are encouraging the adoption of sustainable business practices in public markets, promoting action that enables sustainable long-term growth and reduces the potential impact of material sustainability risks over time
We are contributing to a growing body of knowledge on the impact of climate change on human health, strengthening our ability to respond to client needs
For an overview of Manulife’s Climate Action Plan, please visit Climate change.
Nature and Biodiversity
Preserving our natural resources is critical to the well-being of future generations. Biodiversity is at the heart of a healthy environment, and we believe in safeguarding forests, wetlands and natural habitats where biodiversity thrives. We are committed to the protection and restoration of biodiversity through our financing activities and investments.
Asset ownership: Biodiversity is one of the factors included in Manulife General Account’s assessment of overall environmental risks and opportunities as a component of the underwriting and monitoring of our investment portfolio.
Asset management: Biodiversity is an element of our overall ESG integration framework, and we are committed to the protection and restoration of biodiversity through our financing activities and investment. In the forests and farms Manulife Investment Management manages, we operate in a way that responsibly manages land and protects sensitive lands and biodiversity through stewardship practices. This includes protection of watersheds, habitats, and critical wildlife, such as bees, squirrels and salmon. In our owned and operated real estate, we seek opportunities to enhance biodiversity in the urban environment and we have partnered with organizations.
Manulife Investment Management was a member of the informal working group for the Task Force on Nature-related Financial Disclosures (TNFD), working to develop the scope of that endeavor to deliver a risk management and disclosure framework for organizations to report and act on evolving nature-related risk. We have pledged our continued support by becoming part of the TNFD Forum, a multi-disciplinary pool of supporters that the TNFD used to develop standards.
In addition, we are signatories to the Finance for Biodiversity Pledge, which included joining several working groups tasked with developing appropriate metrics and stewardship activities in support of commitments to biodiversity and nature by asset managers. By signing onto the pledge, we’ve committed to collaborate and engage with companies on biodiversity and assess our own biodiversity impact. This will enable us to set targets and disclose appropriate reporting on biodiversity aspects by 2024.
In our management of timberland and agriculture assets as a fiduciary for our investors, we have in interest in safeguarding forests, wetlands, and natural habitats where biodiversity thrives to make these assets themselves, as well as the benefits they provide—financial or otherwise—more resilient. To put it another way, nature is our business, and the forests and farms we manage are ecosystems. Our objective is to produce returns for our clients by keeping these ecosystems healthy.
For an overview of Manulife’s Climate Action Plan, please visit Climate change.
Community Investment
As part of our Impact Agenda, we are dedicated to advancing positive, measurable social and environmental change to build a better business to better the world. Through our community investments, and aligned to our Impact Agenda, we work with organizations to foster healthier, more equitable communities across our three interconnected strategic focus areas: empowering sustained health and well-being; driving inclusive economic opportunity; and accelerating a sustainable future. Our strategy prioritizes investments to organizations that:
Share a commitment to diversity, equity and inclusion, particularly through representative leadership and targeted programming to historically underserved communities
Drive community-centered solutions, working collaboratively across sectors, aimed at innovative and scalable initiatives
Demonstrate a holistic approach to the many aspects of well-being, including mental health, to improve and sustain positive outcomes over the long-term
Utilize data to measure impact with key performance indicators and a commitment to reporting on progress
Our approach takes many forms, including direct funding, volunteering, which leverage skills-based activities, and employee giving and matching programs
Investment Focus: We focus on removing barriers and empowering people in the communities where we operate. With humanitarian and natural disasters happening around the world, we are committed to helping communities respond effectively with resiliency and recovery resources. We consider funding strategically aligned project or program specific grants, as well as capacity building grants or general operating support to organizations whose missions are highly aligned with our investment focus areas. In addition to programmatic funding, we also fund research and innovation to support cutting-edge ideas to understand, address, and promote sustainable change.
Access to financial products and services, and improvements in financial literacy, can have a profound impact on people’s lives and their ability to prepare for their future.
We use our expertise and resources to advance financial inclusion and literacy, which empowers individuals, families, and communities, to lay the foundation for economic prosperity that benefits us all. We promote financial inclusion through community investment and financial education programs, as well as several specialized products and services that make our offerings more accessible, such as affordable critical illness and health insurance products, digital insurance products, and mobile banking solutions.
Diversity, Equity and Inclusion
We live by our mission to make decisions easier and lives better. Foundational to our success is ensuring that all our colleagues, customers and stakeholders are respected, feel connected to each other and to our mission, and are treated with equity and dignity.
A diverse, equitable and inclusive culture nurtures innovation and attracts and retains the best talent, which helps us deliver better customer solutions and a greater impact on the world. Our global Diversity, Equity, and Inclusion (DEI) aspiration is to cultivate a diverse, equitable and inclusive workplace in which all employees are inspired to bring their authentic and whole selves to work. We are passionate about this initiative as it enables employees to thrive personally and professionally while also providing the best service to our customers, business partners and communities.
Our DEI strategy focuses on four pillars:
Our Workforce – diversity at all levels in the organization that is reflective of the communities we serve
Our Workplace – employees thrive because they belong and can bring their authentic selves to work
Our Business – inclusivity of products and services that support our diverse communities and customers
Our Community – strong partnerships and DEI support in the external communities in which we live, work and serve
Our global DEI strategy is spearheaded by our Global Chief Diversity, Equity and Inclusion Officer, the Global DEI team and our Global DEI Council, who collectively guide, support and facilitate its implementation. Chaired by our Chief Executive Officer and Chief Human Resources Officer, the Council is made up of executive leaders who are driving business impact through our DEI strategy and play a key role representing business functions across the organization. Council members meet as a group quarterly and act as advocates in their respective divisions and functions on an ongoing basis.
Ethical business practices and good governance are integral to our legacy and long-term success. Achieving this requires a commitment to integrity and consistently high standards from all partners, including our vendors.
We support businesses owned by women, racial and ethnic minorities, persons who identify as LGBTQ+, veterans, persons with disabilities, and Indigenous Peoples as part of our efforts to reflect the diversity of the communities in which we operate.
In the United States, we are a founding member of the Pacesetters initiative, a partnership established by the Greater Boston Chamber of Commerce in which large and mid-sized companies and anchor institutions use their collective purchasing power to create opportunities at scale for local businesses owned by members of ethnic minorities. We have a dedicated supplier diversity web page to encourage diverse suppliers to pursue opportunities with us.
Talent Management
Talent attraction and retention: To find the talent we need to deliver on our strategic objectives, our core approach to talent attraction is focused on building enhanced talent networks to entice top candidates in the market. We are focused on delivering innovative ways to engage candidates with a personalized experience. We strive to show candidates that we are committed to helping ensure they can bring their whole selves to work and to help them imagine what they can achieve as a Manulife employee.
Training and development: We are committed to creating a workplace that offers unlimited opportunities for employees to realize their career goals. Employees want to work for an organization they believe cares for them, values their perspective and contributions, invests in them, and gives them flexibility to deliver great work. Whether it is working abroad, exploring a new career direction, or simply progressing in their chosen field, we help our employees reach their full potential through focused development programs and online resources. We provide employees with opportunities for learning and development at all stages of their career. In addition to on-the-job training, mentoring, coaching, in-house programs, and online learning resources, we often subsidize the cost of continuous learning and examinations as employees pursue their learning and individual development plans.
Engagement and recognition: Our ability to engage the best, diverse talent is critical to retention. As individuals are focused on working for organizations that align with their values, we believe our culture gives us a competitive edge.
Listening to our people, and understanding what’s most important to them, are key components of our approach to building engagement. We facilitate employee listening through a variety of platforms and channels. Our annual engagement survey is an opportunity for all our colleagues to tell us what we’re doing well and what we could enhance to help everyone feel connected, empowered and supported.
Recognition is a key driver of engagement and as such we have two globally adopted recognition programs: Podium and Stars of Excellence. Podium is a digital recognition platform that allows colleagues to recognize one another for day-to-day contributions and their service anniversaries. Stars of Excellence is our premier annual recognition program to recognize the top 150 colleagues for achievements in the previous calendar year.
Employee Health and Wellness
One of our most importantpriorities at Manulife is supporting the health and well-being of each one of our employees around the globe. We strive to create a culture of well-being that supports the diverse nature of our workforce. Supporting our employees’ health, safety, and well-being means:
Protecting the health, safety, and well-being of our employees, including ensuring compliance with legislative requirements
Providing employees with flexibility when it comes to their benefits and wellness choices
Supporting the evolving needs of our employees
Our employee programs cover a wide array of benefits plans with options that employees can tailor to their individual needs. Some of our benefits and wellness programs include:
Health, dental, vision, short-term disability, long-term disability, and life and accident insurance coverage
Retirement savings plans
Care and support for employees with cancer
Extra Personal Days for employees to use during each calendar year
Mental health support and benefits
Family friendly benefits for families of all kinds and family planning
Adoption, fertility medication and surrogacy financial support in Canada and the U.S.
Paid maternity leave, paid parental and adoption leave in Canada and the U.S.
In addition to parental and maternity leaves, various family leaves are available to employees in select geographies.
Designated breastfeeding facilities in many of our corporate offices
Emergency childcare and eldercare subsidies in Canada and the U.S.
Ability to expense childcare through a flexible wellness account via employee benefits, up to the available maximum in Canada and the U.S.
The maternity and paternity leaves across Manulife in Asia are at or above statutory requirements (in certain locations such as Cambodia, Hong Kong and Indonesia, our provision is above the statutory and market practices)
Flexible work programs following a human-centred approach
Access to industry-leading expertise and financial products to help employees optimize their own financial planning
Healthy workspaces, including healthy food options in cafeterias and amenity spaces supporting wellness at several locations.
Occupational Health and Safety
Our Global Health and Safety program embodies its commitment to providing a safe and healthy workplace in compliance with legislative occupational health and safety requirements. This commitment to health and safety is an integral part of our operations and involves the co-operation and support of every individual within the Company.
All employees have a responsibility for fostering a healthy and safe working environment:
Our globalWorking Better Program helps guide how we manage work schedules and connect with each other to boost our effectiveness.
Senior management is responsible for enforcement of Manulife’s Global Health and Safety Policy and for ensuring that Health and Safety Committees are established as required by law. Leaders are held accountable for the safety of employees under their supervision. This includes ensuring that equipment is safe and that employees work in compliance with established safe work practices and procedures.
Our Global Health and Safety Policy recognizes that everyone in the organization has specific responsibilities for Occupational Health and Safety integrated into everyone’s job. This includes:
Encouraging all employees to comply with all Company operating procedures pertaining to health and safety and empowering them to take ownership of their safety and report any concerns.
Encouraging employees, supervisors, and senior management to raise and resolve health and safety issues as part of their daily business duties.
Referring items to senior management if the department manager/supervisor is unable to correct the issue and, to use the Joint Health and Safety Committee, Health and Safety teams, and Employee Relations if the issue(s) remain unresolved.
Our workplace policies and programs prioritize prevention, monitoring of our health and safety procedures, and training. This includes procedures to investigate work-related injuries, ill health, diseases and incidents. Our workplaces have emergency response plans to identify risks and to plan for emergency situations to premises and employees and we identify actions required to prepare for, and respond to, emergency situations. Internal inspections including health and safety workplace, security and real estate/building operations are completed, and hazards and risks are addressed.
We provide employee education, including health and safety training, first aid training for health and safety committee members and training on our Global Discrimination, Harassment & Violence Policy. Occupational Health & Safety criteria are included in procurement process and contractual requirements. We prohibit retaliation against employees who report workplace health and safety concerns, injuries, or illnesses or who participate in health and safety-related investigations.
Customer Experience and Well-being
Customer Experience and NPS: Delivering great customer experience starts with listening closely to our customers, learning from their signals and cues and responding quickly with action. Through our Net Promoter System (NPS), enabled in all of our business globally, we collect real-time feedback from customers at all key moments of interaction. This transactional feedback is delivered directly to the teams that are empowered to take steps to fix or change the customer experience. We are continually maturing our NPS system, ensuring we have the best coverage across key touchpoints and the right people in place to act on real-time feedback.
Customer complaint resolution: We are committed to providing high-quality service and products to assist customers in making better financial decisions. If customers have questions or concerns, we see it as our responsibility to respond promptly, accurately and with the utmost courtesy. Our websites outline complaint resolution processes in each region. The Audit Committee annually reviews the procedures for dealing with customer complaints.
Behavioural Insurance: We are at the leading edge of behavioural insurance, a shared value approach to life insurance that encourages customers to take small steps every day towards living longer, healthier, better lives.
When customers live longer, healthier lives, it is good for them and for their life insurers, while society benefits as a whole — it is a primary example of bringing the principles of shared value to life.
Whereas traditional insurance policies are priced based on a limited snapshot of a customer’s data (e.g., age, smoking status, gender, basic health indicators) at the point of purchase, this new type of insurance provides financial protection and rewards customers with premium savings and other benefits when they make healthy lifestyle choices.
Our approach to respecting and promoting human rights is guided by the United Nations Guiding Principles on Business and Human Rights and the International Labour Organization (ILO) core conventions, which states that businesses must “avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved.” This is embedded in our values, in our decision-making and in our expectations of ourselves and those with whom we work.
Throughout our organization, our teams act in accordance with Manulife’s Code of Business Conduct and Ethics, which affirms our commitment to ethical conduct and to operating within the laws and regulations of every jurisdiction in which we operate.
Risk Management
The activities required to achieve the Company's mission involve elements of risk taking. Our approach to risk management is governed by our Enterprise Risk Management ("ERM") framework, which provides a structured approach to risk taking and risk management activities across the enterprise, supporting our long-term revenue, earnings, and capital growth strategy. We have a common approach to managing all risks to which we are exposed, and to evaluating potential directly comparable risk-adjusted returns on contemplated business activities.
Three Lines of Defense Model
A strong risk culture and a common approach to risk management includes a “three lines of defense” governance model that segregates duties among risk taking activities, risk monitoring and risk oversight, and establishes appropriate accountability for those who assume risk versus those who oversee risk.
Our first line of defense includes the Chief Executive Officer (CEO), Segment and Business Unit General Managers, Global Function Heads and all business operations personnel, who are ultimately responsible for their business results, the risks they assume to achieve those results, and for the day-to-day management of the risks and related controls.
The second line of defense is comprised of the Company’s Chief Risk Officer (CRO), the Global Risk Management (GRM) function, the Company’s Chief Compliance Officer and the Global Compliance Office, and other global oversight functions. Collectively, this group provides independent oversight of risk taking and risk management activities across the enterprise.
The third line of defense is Audit Services, which provides independent, objective assurance that controls are effective and appropriate relative to the risk inherent in the business and that risk mitigation programs and risk oversight functions are effective in managing risks.
Responsible risk governance
The Board of Directors oversees our culture of integrity and ethics, strategic planning, risk management, and corporate governance, among other things. The Board carries out its responsibilities directly and through its four standing committees. The Risk Committee of the Board primarily oversees the management of our principal risks, and our programs, policies and procedures to manage those risks. They are supported by our Executive Risk Committee, which includes the CEO, CRO and other executive leadership, and they are responsible for the oversight of the execution of our enterprise risk management program. It establishes and presents for approval to the Board the Company’s risk appetite and enterprise-wide risk limits and monitors our overall risk profile, including key and emerging risks and risk management activities. The Executive Risk Committee is further supported by a number of oversight sub-committees across global functions and business segments.
Effective risk management
The ERM framework is communicated through risk policies and standards, which are intended to enable consistent design and execution of strategies across the organization. Management is responsible for managing risk within the Company’s risk appetite — which defines the amount and types of risks we are willing to assume in pursuit of our objectives — and has established risk management strategies and monitoring practices.
While we only pursue risks that we believe we can appropriately analyze and monitor, we also manage risks which arise outside of our direct influence. We recognize that risk exposures change over time. If exposures materially increase, we will activate management actions designed to bring exposures back to desired levels. As an integrated component of our business model, risk management assists the Company in achieving our objectives and in reaching higher levels of operational excellence, while encouraging transparency and organizational learning.
We pride ourselves on honesty, integrity, and an uncompromising dedication to the highest standards of business conduct. We have a reputation within the industry that speaks to our moral compass and professionalism when it comes to our ethics and compliance culture.
Our Code of Business Conduct and Ethics (the “Code”) affirms the company’s commitment to ethical conduct and its practice of complying with all applicable laws and avoiding potential or actual conflicts of interest. The Board of Directors, with the support of the Audit Committee, oversees compliance with the Code and reviews and approves the Code on an annual basis.
Our employees and all members of Manulife’s Board of Directors receive training and must certify their compliance with the Code annually, be well-versed in its provisions and conduct themselves according to both the letter and the spirit of those provisions. Employees are also required to comply with all relevant laws and regulations, as well as internal policies, standards and guidelines, which include those outlined in our Policy Overview chart. In addition to providing compulsory and supplemental training that includes annual mandatory training on the Code, we run specialized employee communication campaigns to reinforce our well-established culture of compliance. These campaigns and training cover topics such as fraud, cyber security, risk awareness, data privacy and security.
We foster an environment where employees at any level may report any compliance concerns to their managers, their segment Chief Compliance Officer, a member of the Law department, the Global Functions Compliance team or a member of the Human Resources department.
Unethical, unprofessional, illegal, fraudulent or other questionable behaviour, including any concerns with respect to auditing and accounting matters, may also be reported through a confidential, toll-free Ethics Hotline or online at manulifeethics.com. The hotline is maintained by a well-known third-party service provider and allows for anonymous reporting if the person so chooses.
If employees feel that their questions or concerns have not been appropriately addressed, they can direct their complaint to Manulife’s Global Compliance Chief or Manulife’s General Counsel. The company absolutely prohibits retaliation of any kind for good faith reports of illegal or unethical behaviour.our.
Tax Transparency
Our tax strategy is based on the following principles:
Complete honesty and integrity
Compliance with all applicable laws and regulations, including transfer pricing guidelines
Contribution to shareholder value
Customer-centric client service
Protection of the Manulife brand and reputation
Operational efficiency and effectiveness
Openness and co-operation with tax authorities
Tax falls within the scope of the Chief Financial Officer’s responsibilities. Ultimate responsibility is with our ELT and Manulife’s Board of Directors. Operational responsibility for tax strategy and risk management resides with Global Tax.
We have established formal committees to review and approve significant transactions and structures. Such committees are accountable to the Executive Leadership team and/or Manulife’s Board of Directors as is deemed appropriate. Manulife’s Global Tax department participates in these committees and Global Tax’s approval is required for transactions and structures with significant tax implications.
We have a global presence operating in numerous countries around the world, each with its own taxation system and tax rates. We comply with transfer pricing legislation and guidelines established by the countries in which we operate, along with OECD transfer pricing guidelines, to ensure that the “arm’s-length” principle is observed in pricing cross-border transactions between Manulife entities. Also, in accordance with the OECD’s Base Erosion and Profit Shifting initiative (BEPS) to enhance tax transparency, we produces country-by-country reporting on our global operations to facilitate the audit work of tax authorities around the world.orities around the world.
Data Security and Privacy
Information risk is a top enterprise risk management concern. We seek to protect our data and that of our customers. As a result, this is a key area of focus at the Board’s Risk Committee meetings, including engagement at least quarterly with the Chief Information Risk Officer on information risk strategies, goals and ad hoc topics, including industry trends.
Information and cyber security governance
Managing information and cyber risks is a coordinated effort across the business. Overseen by our Chief information Risk Officer, our enterprise-wide information risk management program establishes the company’s information and cyber-security framework, including governance, policies, standards, and appropriate controls to protect information and computer systems.
Data Privacy
We have a global framework for managing the Company’s privacy risk, which is overseen by our Global Chief Privacy Officer, who is accountable to the Global Compliance Chief. The framework is anchored by our Global Privacy Risk Management Policy and designed to:
Help ensure compliance with legal and regulatory requirements governing the protection of personal information in all the jurisdictions in which we operate, while also promoting consistency in personal information handling practices throughout the Company.
Maintain and foster customer and employee trust.
Minimize the occurrence and impact of privacy-related incidents.
Executive Compensation
We expect executives to make decisions that are in the long-term interest of the company. Executive compensation is designed to contribute to our long-term sustainable growth by rewarding executives for strong performance in executing our business strategy. Pay for performance is at the core of our approach to executive compensation. Compensation is tied to the achievement of our short, medium and long-term goals, so that most of what our executives earn is variable and not guaranteed. In practice, this has meant that executives earn more when performance is strong and earn less when performance is not strong. The Board also has the discretion to adjust incentive payouts to reflect business performance.
Managing conduct risk is central to our values of Obsessing about Customers and Doing the Right Thing. Our values underpin our commitment to treating customers fairly and ensuring positive customer interactions. The goal of our marketing strategy is to meet the needs of our customers while supporting the needs of future generations. As a Fortune 500 enterprise, we are conscious of our influence on the world — and the great responsibility that comes along with that.
We have many practices and processes in place that align with the fair treatment of customers. These include strong protection of private information, plain language communication with customers, responsive customer service and complaint handling processes. We ensure our products are clearly explained and honestly marketed so our customers can make informed decisions and choose products and services that are most beneficial to them.
We actively participate in industry dialogue with regulators and industry associations to provide feedback on potential regulations and learn more about regulatory expectations.
Public Policy
Policy dialogue and participation improves our ability to understand and address critical issues, and to make strategic decisions that benefit our stakeholders. Public policy discussions can also be directly relevant to the evolving legislative and regulatory requirements under which Manulife and our financial services products are governed.
Direct engagement:
Certain employees engage with government or regulatory officials as part of their roles, and we are committed to high ethical standards in these relationships. We maintain policies, such as the Code of Business Conduct and Ethics, to keep the confidence of our customers, investors and other stakeholders with respect to this engagement. For example, our policies stipulate that any lobbying efforts on issues affecting our business must be done in compliance with all local lobbying regulations, including Canada’s Corruption of Foreign Public Officials Act and Lobbying Act, and with all local reporting requirements. We recognize that we must take special care to use our corporate positions responsibly when dealing with government agencies and representatives. Unless it is a routine regulatory or government interaction (e.g., regular exam, regulatory filing, or response to a request for information), any contact with a government official must be approved by the business segment’s Chief Legal Officer and the Global Head, Regulatory and Public Affairs. Employees must not engage in lobbying activities on behalf of the company unless specific authorization is obtained.
Political contributions:
Our Company’s general policy is that we will not make any political contributions. In the U.S., federal law prohibits corporations from contributing to candidates; however, it does allow corporations to establish Political Action Committees (PACs), funded by voluntary contributions from eligible employees. The John Hancock Political Action Committee (JHPAC) is organized by employees of John Hancock and its subsidiaries. It is a voluntary association of individuals formed in order to make their collective voice heard in the political process. Because corporations are permitted to pay the administrative costs of a PAC, every dollar contributed to JHPAC is distributed to candidates for elected office. An overview of the JHPAC is available on the Federal Election Committee website. John Hancock does not operate or contribute to any “Super PACs” and does not operate any PACs at the state level.
Industry memberships:
Certain organizations may have interactions with government officials on matters of interest to our industry and may promote public policy objectives important to us, our stakeholders or the broader community. Our membership in, or financial support of, these organizations does not imply that we support every position taken by these organizations or those of their other members. Where positions differ from ours, we voice concerns as appropriate by engaging with these organizations through boards, committees or publicly, as necessary.
In addition to performance data reported in our 2022 ESG Report, Manulife tracked the following supplemental workforce indicators:
Workforce diversity
2022
Women in junior management positions 1
47%
Women in STEM-related positions 2
35%
Women in revenue-generating positions
50%
1. Director and manager levels
2. Actuarial, Advanced Analytics and IT
In early 2019, Environmental, Social and Governance (ESG), oversight was added to the charter of the Board’s Corporate Governance and Nominating Committee. The Committee reviews our sustainability strategy progress and stays informed of ESG trends, risks and opportunities through management reporting. Members of the Committee include the Board Chair and five independent Board members.
The Committee’s oversight of ESG complements the work of the Executive Sustainability Council (ESC). The ESC, which consists of eight members of our executive leadership team, is responsible for establishing the enterprise’s sustainability ambition, guiding the development of the sustainability strategy and providing recommendations and direction on matters related to sustainability. In addition to the ESC, we have a subsidiary-specific committee that executes asset class specific sustainability objectives.
The following are our Sustainability related policies and position statements that guide our work:
Manulife will not knowingly make direct investments in companies that manufacture cluster munitions where we have discretion to do so. This policy applies to policyholder funds (Manulife’s “General Account” funds) and third-party client funds of Manulife Investment Management. This policy does not apply to investments where we do not have investment discretion such as index investments, unaffiliated fund mandates and client-directed managed accounts.
Manulife uses an independent third party to maintain an exclusion list of companies that manufacture cluster munitions. The exclusion list is updated on a quarterly basis.