Industry

Recovery Must be Sustainable and Inclusive, Insist Canadian Pension Funds

Eight CEOs demand greater transparency from companies to enable investor insight.

The CEOs of eight major Canadian pension funds have called on companies and investors to drive sustainable and inclusive economic growth, while also increasing resilience in the recovery from the Covid-19 pandemic.

Representing C$1.6 trillion in assets under management, the CEOs of AIMCo, BCI, Caisse de dépôt et placement du Québec, CPP Investments, HOOPP, OMERS, Ontario Teachers’ Pension Plan and PSP Investments stated their commitment to the creation of sustainable and inclusive growth through the integration of ESG factors into strategies and investment decisions.

The signatories called for greater transparency from companies to enable investor insight into diversity and inclusion, human capital, board effectiveness and climate change, amongst other ESG risk factors.

“We will continue to strengthen our own ESG disclosure and integration practices, and allocate capital to investments best placed to deliver long-term sustainable value creation,” the statement read.

The statement also called for standardisation of reporting structures and frameworks, noting the difficulties posed by current variations. “While we recognise companies face a myriad of disclosure frameworks and requests, it is vital that they report relevant ESG data in a standardised way,” it said. Despite these challenges, the signatories said clear disclosure is an obligation, and that doing so will unlock opportunity and mitigate future risk.

The group said measuring and disclosing performance on material ESG factors using the Sustainability Accounting Standards Board (SASB) standards and the Task Force for Climate-related Financial Disclosures (TCFD) framework is crucial and achievable, and also a distinguishing feature of “great companies” in the 21st century.

“Providing clear guidance to companies on the sustainability frameworks that we support will help unlock the consistent and comparable information we need to make prudent investment decisions,”  said Jo Taylor, President and Chief Executive Officer, Ontario Teachers’ Pension Plan.

By calling for the building of a resilient and inclusive global economy, the group aligned themselves with a growing international push towards sustainability, focused on management of ESG factors. “Increased transparency and standardised reporting on ESG matters will help investors better assess company risks and long-term performance and ultimately contribute to building a stronger and more sustainable economy for all,” said Charles Emond, President and CEO, Caisse de dépôt et placement du Québec, one of the signatories.

The impact and disruption caused by the ongoing Covid-19 pandemic, alongside “other tragic events” events, have highlighted inequalities and shortcomings concerning business strengths and social inequity, the signatories observed. “The time to act is now, and each of us has a role to play. We call on companies and investment partners to help drive las􀆟ng change by placing sustainability at the centre of their planning, operations and reporting.”

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