At CPP Investments we consider responsible investing simply as intelligent long-term investing. Over the exceptionally long investment-horizon over which we invest, ESG factors have the potential to be significant drivers – or barriers – to profitability and shareholder value. For these reasons we refer to what many call ‘Responsible Investing’ activities simply as Sustainable Investing.
Given our legislative objective, we consider and integrate both ESG risks and opportunities into our investment analysis, rather than eliminating investments based on ESG factors alone.
As an owner, we monitor ESG factors and actively engage with companies to promote improved management of ESG, ultimately leading to enhanced long-term outcomes in the companies and assets in which more than 20 million CPP contributors and beneficiaries have a stake.
CPP Investments has established governing policies, approved by our Board of Directors, to guide our ESG activities. Our Policy on Sustainable Investing establishes how CPP Investments approaches ESG factors which aligns with our legislative objective to maximize long-term investment returns without undue risk of loss. Our Proxy Voting Principles and Guidelines provide guidance on how CPP Investments is likely to vote on matters put to shareholders and communicate CPP Investments’ views on governance matters.
2020 Sustainable Investing Report
Investing for CPP Contributors and Beneficiaries
President’s Message
We believe that, by fully considering ESG risks and opportunities, we become better investors, able to both enhance returns and reduce risk for our more than 20 million contributors and beneficiaries.
Our Approach to Sustainable Investing
The most recent triennial report by the Chief Actuary, released in December 2019, again confirmed that the base and additional CPP are sustainable at the legislated contribution rates over the 75-year projection period. While the Chief Actuary’s report was produced prior to the COVID-19 pandemic, it takes into account changes in demographics, the economy and investment environments, including significant financial-market events.
CPP Investments' Focus Areas
Climate Change
Climate change can present material financial risks and opportunities for companies and impact long-term investment values.
Water
Effective management of water supply, use and quality is fundamental to the long-term sustainability of companies in many industries.
Human Rights
Human rights are relevant from an investment perspective because human rights are key to building long-term sustainable value, and when not appropriately managed can lead to operational disruptions and reputational issues.
Executive Compensation
Long-term shareholder value is more likely to be created when management and investor interests are aligned. Clear and appropriate links between executive pay and company performance contribute to alignment of those interests.
Board Effectiveness
Board effectiveness is one of the most important topics in corporate governance. Having the right board in place to guide strategy and oversee the management of risk is critical to the long-term value of our investee companies.
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