Summertime in Toronto means one thing for me: time to hit the bike lanes. Every year, I tune up my bike, don my helmet, and take on the risky proposition of navigating Toronto’s vehicle-choked streets on two wheels. It’s a risk I feel is worth taking; after all, my love of cycling easily outweighs my fear of Toronto roads. It’s a risk/reward balance I go through every spring, so it’s probably fitting that the biggest insights in this issue of The Analyst (at least to me) all seem to focus on risk—what the risks are and how you as charterholders can deal with them. Here are the top three:

The link between fossil fuels and climate change – Salman Amin covers the Annual Pension Conference and focuses on one presenter in particular: Jane Goodland, Senior Investment Consultant, from Towers Watson, who explains how to invest strategically in fossil fuels with a long-term focus. As more and more long-term asset owners seek to build sustainability into their investment portfolios, it can be hard to know where to start in order to promote meaningful change among those companies in which they invest. Amin’s article outlines the issues and presents a checklist for engagement and change.

Advisors might be projecting their beliefs about risk onto their clients – This year’s Hillsdale Canadian Investment Research Award winners explore the factors that drive advisors to shape their clients’ portfolios. Authors Stephen Foerster, Juhani T. Linnainmaa, Brian T. Melzer, and Alessandro Previtero explore a curiously strong correlation between portfolio risk and the use of an advisor in Canada. And while the paper delves into variations between client portfolios over a relatively large data set, its authors find that advisors’ own risk-taking is the strongest predictor of risk-taking in their clients’ portfolios, even after controlling for advisor and client characteristics. Interesting findings.

Just because it’s outsourced doesn’t mean it’s not a risk – In the push to drive down costs and boost financial performance, companies are turning more and more to outsourcing. As that happens, concentration risks loom, and companies might not be aware of what they are. Call it the newest form of shadow system, and you can read about how to deal with it in James Dennison’s excellent article.

Finally, I’d like to welcome Brooke Smith, who is taking over as editor of The Analyst, starting with the September issue. She’ll be writing this column and will be using her editorial talents to continue making this publication an interesting and useful read for all members of CFA Society Toronto.

Have a great summer!