Canada is the fourth-largest oil producer in the world and often ranked as having amongst the worst environmental records of developed countries.
Shifting the country away from oil and gas therefore has the potential to significantly contribute towards climate change mitigation. It is in this context that I am very happy to see Canada's eight largest pension funds (also affectionately known as the "Maple 8" and collectively manage CAD1.6 trillion of assets) coming together to urge companies and investors to put sustainability and inclusive growth at the centre of the COVID-19 recovery. In their joint statement, they say that "it is not only the right thing to do, it is an integral part of our duty to contributors and beneficiaries. Doing this will unlock opportunities and mitigate risks, supporting our mandates to deliver long-term risk-adjusted returns".
Only last October at a Global Impact Investing Network conference, I heard a panel debate whether consideration of ESG forms part of a pension fund's fiduciary duty towards its beneficiaries. In Canada at least, that debate seems to have been settled.
The Maple 8's statement goes on to call on companies to measure and disclose their ESG performance using the Sustainable Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework. This push for standardisation is extremely welcome, given the general industry consensus that the multitude of ESG reporting standards (or the so-called "alphabet soup") is one of the biggest obstacles today, both for companies to measure and report on their own ESG performance, as well as for asset owners and asset managers to integrate ESG considerations into their investment decisions.
For the first time, the CEOs of AIMCo, BCI, Caisse de dépôt et placement du Québec, CPP Investments, HOOPP, OMERS, Ontario Teachers’ Pension Plan, and PSP Investments have issued a joint statement. Together, they call on companies and investors to provide consistent and complete environmental, social, and governance (ESG) information to strengthen investment decision-making and better assess and manage their collective ESG risk exposures.