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Sustainable Investing

We believe organizations that effectively anticipate, manage and integrate sustainability-related factors that are material to their business are more likely to endure and create sustainable value over the long term.

The nature of economic business risks and opportunities has fundamentally changed in this century.

Companies are operating in an increasingly competitive and digitally connected world, as they look to provide goods and services for almost eight billion people. This has led to heightened and rapidly evolving stakeholder expectations of sustainable and inclusive growth. As a result, sustainability-related factors, including climate change, are increasingly and more directly impacting the strategic, operational and financial profile of companies around the world.

We believe that companies and investors that are resilient, agile and able to anticipate, manage and integrate these factors into their strategy are more likely to preserve and create value over the long term than those that do not.

We are a differentiated capital provider that views sustainability-related considerations as business critical. We partner with portfolio companies to create long-term value by integrating material sustainability-related risks and opportunities in all phases of the investment life cycle.

Read our 2022 Report on Sustainable Investing to learn more about:

factors Redefining Sustainability Related Risks And Opportunities
cpp Si 2022 Charts V1a En Vertical

2022 Report on Sustainable Investing

Summary Presentation of 2022 Report

Investing in the path to Net Zero

Policies

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Path to Net Zero

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We believe that the performance of our portfolio will be influenced by how well it adapts alongside the global economy on the path to net zero. As such, we believe stewarding the portfolio to net zero is in the best interests of the contributors and beneficiaries of the Canada Pension Plan and meeting our mandate. We commit our portfolio and operations to being net zero of greenhouse gas (GHG) emissions across all scopes by 2050.

We are holding ourselves accountable to our net-zero commitment by taking the following actions:

net Zero Commitment

Our commitment is made on the basis and with the expectation that the global community will continue to advance towards the goal of achieving net-zero greenhouse gas emissions by 2050. These advancements include the acceleration and fulfilment of commitments made by governments, technological progress, fulfilment of corporate targets, changes in consumer and corporate behaviours, and development of global reporting standards and carbon markets, all of which will be necessary for us to meet our commitment. We are committed to staying ahead of and contributing to developments that will impact our portfolio’s path to net zero. We are taking an active role in the transition by financing emissions reduction and supporting the decarbonization of assets.

We are currently developing a proprietary net-zero scenario rooted in expertise and knowledge from across the organization. Our net-zero scenario is comprehensive and includes views on the whole economy transition to net zero. This scenario represents our more optimistic beliefs about technology innovation and evolving consumer behaviour, which distributes the burden of emissions reduction across stakeholders, including governments, industry and consumers.

This work will be used to inform our investment decision-making and track our assumptions about the global community’s advancement to net zero by 2050. We will periodically revisit this scenario as pathways to net zero evolve and emerge over time.

As the world moves toward net zero, we aim to manage the investment risks and invest to capture and support value-creating opportunities that will arise as society works to remove GHG emissions from the whole economy.

We recognize that managing climate change is an iterative process; the path to net zero will not be linear, but we will continue to take action and report on our progress.

climate Change Voting Stats

Investing in the path to net zero

We commit our portfolio and operations to being net zero of GHG emissions across all scopes by 2050.

Overview

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Principles

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Sustainable Investing Principles

The principles underlying our approach to sustainable investing include, but are not limited to, the following: 

  • Given our legislative objectives, we consider and integrate both sustainability-related risks and opportunities into our investment analysis and asset management activities, rather than eliminating investments based on environment, social and governance factors alone; 
  • We consider the economic impacts from these  sustainability-related risks and opportunities, not only across the investment life cycle, but across asset classes, where such considerations are material; 
  • As an active owner, we monitor sustainability-related factors and engage with companies to promote improved management of these factors, where material, to enhance long-term outcomes in the companies and assets in which we invest; 
  • We support the division of authority and responsibilities among the triad of interests that is the core of good corporate governance – shareholders (owners), directors and managers – and we view directors as responsible to the company on whose board they serve, but accountable to the company’s shareholders as owners; 
  • Where sustainability-related factors, including climate change, are material to the company, we expect boards to ensure they are considered and integrated into the company’s strategy. 
  • We expect disclosure of financially relevant, potentially material sustainability-related factors to allow investors to better understand, evaluate and assess these risks and opportunities, including their potential impact on a company’s performance. We support alignment of reporting with SASB Standards and the Task Force on Climate-related Financial Disclosures (TCFD) Framework. (Our reporting in accordance with the TCFD recommendations is available here); and  
  • Employees, customers, suppliers, governments and the community at large have a vested interest in forwardthinking corporate conduct and long-term business performance. 

We strive to be both principled and pragmatic, taking into account industry norms, corporate performance, competitive issues, regulatory requirements and other factors necessary to put specific issues into context.

Climate Change Principles

Fulfilling our net-zero commitment will be done in accordance with our Climate Change Principles. These principles help guide our decision-making so we can deliver on our mandate against the backdrop of escalating climate risk and opportunities by supporting the transition of the whole economy towards sustainability. 

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 based on our investment beliefs and expertise 
Principle 5: Report on our actions, their impacts and our portfolio emissions 

Recent comments from CPP Investments on sustainability-related consultations

Path to Net Zero

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Policies

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We believe that good corporate governance enhances long-term shareholder value. One of the most effective ways we can convey our views to boards of directors and management and fulfil our stewardship responsibilities as an active owner is to vote our proxies at annual and special meetings of shareholders. We oppose resolutions that are likely to diminish long-term shareholder value, even though they may produce short-term gains. 

Proxy Voting Overview

proxy Voting Map Sustainable Investing Report 2022

2022 Updates to Our Proxy Voting Principles and Guidelines 

See the active ownership section of our 2022 Report on Sustainable Investing for details.  

  1. Updated our Maintaining Effective Boards Policy to indicate that we will vote against the re-election of a director who underperforms or contributes to a material environmental, social or governance failure 
  2. Escalated our concern with classified boards at public portfolio companies as this structure actively inhibits the rights of shareholders to hold specific directors to account annually
  3. Highlighted the importance of inclusion in boardroom dynamics
  4. Enhanced our gender diversity voting practice by expanding the countries where we will vote against the nominating committee chair if the board has less than rounded 30% female directors to include South Africa and New Zealand
    Evolution of Our Gender Diversity Voting Policy

Principles

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Overview

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