And how asset owners can tap into them.
Voice over exit. That’s the succinct phrase Alberta Investment Management Corporation (AIMCo) uses to describe its philosophy on sustainable investing, preferring to engage with companies, rather than divesting.
Environmental, social and governance (ESG) factors were always around, but now they’re here to stay. Under the new Ontario Pension Benefits Act (PBA), effective Jan. 1, 2016, a plan sponsor’s statement of investment policies and procedures (SIPP) must include information about whether ESG factors are incorporated and, if so, how. And, by the beginning of […]
In Ontario, the regulator recently made it a requirement effective Jan. 1, 2016 for pension funds to disclose whether environmental, social and governance (ESG) factors have been incorporated in the pension fund’s Statement of Investment Policies and Procedures (SIPP). Similar provisions are already in place in the United Kingdom, France, Germany, Sweden and Belgium, and it’s expected more Canadian provinces will consider making ESG consideration mandatory as well. Given how recent the requirement is, most pension funds are just starting to discuss their beliefs around ESG factors and the degree to which they will be incorporated in the SIPP and investment decision making.
Where responsible investing meets risk management
The Concordia University Foundation has announced the creation of a sustainable investment fund.
Save your money, save the world? Pension funds, we are told, can be a force for social good, from promoting sustainable environmental practices, to punishing companies that cooperate with oppressive regimes, to improving the quality of corporate governance itself.
Recently, the news has been dominated by stories of National Football League (NFL) players being arrested for assault, domestic violence and a series of other charges. The NFL is a private organization, functioning as a co-operative for the owners of the various teams. Its response to these issues with its “product” has been mixed and, by some people’s estimation, has not really addressed a systemic problem. But what if the NFL was a publicly traded company (the league as a corporation and the teams as divisions or wholly owned subsidiaries)? How would you expect your investment manager to evaluate the business model, corporate policies and governance practices? Would you want your manager invested in NFL securities?
From a slave trade response to thematic investing, SRI has come a long way.
The Toronto Stock Exchange (TSX), S&P Dow Jones Indexes and RobecoSAM have launched the S&P/TSX 60 ESG (environment, social and governance) index.