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Sustainable Investing

We believe that companies that effectively manage Environmental, Social and Governance (ESG) factors are more likely to create financial value over the long term, improving investment performance by the Fund. As we work to fulfill our mandate, we consider relevant ESG matters when evaluating opportunities, making investment decisions, managing our investments and engaging with companies to seek improvements in business practices and disclosure.

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.

Integration & Asset Management

Our SI team works closely with investment and asset management teams on all major transactions across the organization to ensure we have an integrated approach to incorporating ESG considerations into our decision-making processes.

Active Ownership

Our active ownership activities encompass engagements with our portfolio companies through proxy voting, in-person meetings, and formal correspondence and collaboration with like-minded organizations. We do this where we believe it will create better long-term outcomes on ESG matters and generate more sustainable value for the Fund.

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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