Approach
Our approach to sustainable investing is not one size fits all.
We invest in hundreds of companies in over 50 countries. These companies range from technology in India to renewable energy in the United Kingdom to real estate in Canada.
The companies we invest in, which we call portfolio companies, can partner with us for access to expertise, capital and connections – a benefit of our active ownership*. We support companies as they assess and manage the sustainability factors, such as human rights or climate change, that impact them the most.
This philosophy helps us create and scale value that is sustainable over the long term.
*when a company owner (like CPP Investments) proactively partners with the company’s board and management team to pursue long-term value creation and preservation.
The uniqueness of our approach
Sustainability can impact long-term investment returns. So, we make sustainable investing a part of the entire investment life cycle – from initial diligence until our point of exit.
Frequently Asked Questions
Sustainable investing to us is simply smart, long-term investing. Our mandate is to maximize returns without undue risk of loss while taking into consideration the factors that affect the funding of the Canada Pension Plan. Companies that effectively anticipate, manage and integrate sustainability-related factors are more likely to deliver strong investment returns over the long term.
We define sustainability-related factors as those including, but not limited to: effective board governance, climate change, environment, health and safety, community engagement, human rights, responsible sourcing and deployment of artificial intelligence, data and cyber security, and other dynamic and emerging factors material to the long-term success of companies.
We are guided by the following Climate Change Principles to inform our decision-making:
- Principle 1: Invest for a whole economy transition required by climate change.
- Principle 2: Evolve our strategy as transition pathways emerge and global standards for decarbonization materialize.
- Principle 3: Exert influence to create value and mitigate risk.
- Principle 4: Support a responsible transition consistent with our investment beliefs and expertise, including our belief that accelerating the global energy transition requires a sophisticated, long-term approach rather than blanket divestment.
- Principle 5: Report on our actions, their impacts and our portfolio emissions.
We have a target of investing at least $130 billion in green and transition assets by 2030. We are committed to setting credible, viable, and attainable climate goals, but we know that the path to net zero is difficult to predict across industries and geographies. As a global investor with holdings in nearly every sector, we must consider the scale of that complexity in our climate plans. We will only set targets when we have the confidence that they are feasible, achievable and aligned with our investment mandate. In the meantime, we will continue to publicly report on our operational and portfolio emissions.
We are committed to using our power as long-term investors to drive down greenhouse gas (GHG) emissions in the world, which is critical to mitigating climate change. We believe that the most effective way to lower GHG emissions is by working directly with high-emitting companies in our portfolio to plan and implement decarbonization action plans. Divesting from high-emitting industries won’t stop production of emissions, but it does mean losing our ability to engage with companies. Instead, tools such as our decarbonization investment approach and proxy voting efforts will help us more directly influence and achieve lower emissions.
We not only adhere to governing sustainability standards, but we also actively promote their adoption. We believe that by doing so we can help global ambitions to manage sustainability, while preserving value. We support sustainability-related reporting aligned with the standards developed by the International Sustainability Standards Board and their reference frameworks, including the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures. We also expect private companies to consider emerging initiatives like the ESG Data Convergence Initiative.
Equity, Diversity & Inclusion
We’re committed to being a fair, inclusive workplace with diverse talent. We have EDGE certification – an audit of our organization’s progress on ED&I. We signed the BlackNorth Pledge and have been recognized as a Catalyst Honours champion.
