Environmental, Social and Governance (“ESG”) Investing
Environmental, Social and Governance (ESG) concerns in investing continue to be one of the most discussed and evolving areas of focus for pension plans across Canada and indeed many other countries across the globe. How individual pension plans are approaching these challenges can vary, but there is no denying the trend towards a continued focus on ESG.
With all this in mind, during 2022 our Plan initiated a workstream meant to formalize our approach to managing the Plan asset's ESG issues, challenges and opportunities. With the help of responsible investment consulting organization Quinn & Partners, the Pension Office staff and Committee received several training sessions on ESG-related topics and a two-year roadmap was developed to help guide our ESG initiatives. A direct result of this process was the development and approval of our Responsible Investment Policy. A formal policy that forms part of the Committee's governance structure, the policy outlines how we plan to action on important ESG focus areas in the coming years. This includes how we incorporate ESG considerations into our investment management and stewardship activities, how we intend to communicate and update our members on our ESG journey as well as outlining the CEO's responsibility for overall direction and guidance of the Plan's ESG approach. The Plan's Responsible Investment Policy will be reviewed and updated on an annual basis. Our complete Responsible Investment Policy is available here.
While 2022 was generally a year of 'learning and development' for the Committee and staff at the Pension Office from an ESG standpoint, in 2023 and beyond continued to progress our approach and implement measurable and reportable performance indicators for our Plan from an ESG lens. We look forward to providing our Members with updates on our progress on this important and evolving initiative in the years to come.
September 2023:
The HRM Pension Plan is pleased to announce that it is now a member of the ESG Data Convergence Initiative (“EDCI”). The EDCI is an open partnership of private equity stakeholders committed to streamlining the private investment industry’s historically fragmented approach to collecting and reporting Environmental, Social & Governance (“ESG”) data. The mission of the organization is to create a critical mass of meaningful, performance-based, and comparable ESG data from private companies. To create this convergence, the Initiative’s participating firms agree to report on a core set of ESG metrics drawn from existing frameworks. The categories include greenhouse gas emissions, renewable energy, board and C-suite diversity, work-related accidents, net new hires, and employee engagement. General Partners (“GPs”) track the agreed-upon metrics for their portfolio companies and report them in a standardized format. The data are shared directly with invested Limited Partners (“LPs”), and aggregated into an anonymized benchmark by Boston Consulting Group. The EDCI’s members currently include 350+ GPs and LPs representing ~$28 trillion in assets under management, including a number of prominent Canadian pension funds.
