This week, the CEOs of Canada‘s eight leading pension plan investment managers, informally known as the “Maple 8,” and representing approximately $1.6 trillion in assets under management, announced that they would join forces to advocate for sustainable and inclusive economic growth in the companies in which they invest.
In a historic first, the CEOs of AIMCo (Alberta Investment Management Corporation), BCI (British Columbia Investment Management Corporation), CDPQ (Caisse de dépôt et placement du Québec), CPP Investments (Canada Pension Plan), HOOPP (Healthcare of Ontario Pension Plan), OMERS (Ontario Municipal Employees Retirement System), Ontario Teachers’ Pension Plan, and PSP (Public Sector Pension) Investments issued a joint statement.
In it, 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.
“It’s also the right thing to do”
“A strong commitment to environmental sustainability, diversity and inclusion and good governance principles will not only make our economy and financial system more resilient, it’s also the right thing to do,” Bank of Canada Governor Tiff Macklem said in an official statement. “Leadership from Canada’s financial sector is essential as we focus on building an enduring and more equal economic recovery from the pandemic. I applaud the commitment expressed today by Canada’s leading pension plan investment managers.”
The signatories further committed to strengthening ESG disclosure within their own organizations, and to allocate capital to investments best placed to deliver long-term sustainable value creation.
The joint statement declares, “Companies have an obligation to disclose their material business risks and opportunities to financial markets, and should provide financially relevant, comparable and decision-useful information. While we recognize companies face a myriad of disclosure frameworks and requests, it is vital that they report relevant ESG data in a standardized way.”
Specifically, they ask that companies measure and disclose their performance on material, industry-relevant ESG factors by adopting the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework.
“We are inspired by this opportunity to help confront the most urgent challenges facing our global community and create more inclusive economic growth. We encourage other parties committed to our vision to join us on this journey towards a more sustainable future for all,” the statement concludes.
Nordic lead
The joint initiative of Canada’s 8 leading follows similar coordinated action among top-level political leaders in the Nordic countries earlier this fall.
Last month, Nordic Prime Ministers formally announced their intent to encourage Nordic institutional investors to scale-up green finance and investments by 2030. The move followed a groundbreaking commitment in 2019 from the Danish pension funds to allocate USD 50 billion to green investments by 2030.
The Nordic Prime Ministers, at an N8 meeting chaired by Danish Prime Minister Mette Frederiksen, jointly declared that the Nordic countries can and should take the lead on green recovery. The joint declaration stressed the urgency for mobilizing private green investments and pointed to the interdependency of the public and private sector in meeting the goals of the Paris Agreement.
At an appearance at the N8 meeting, Nordic pension fund CEOs also announced their aim to mobilize collective commitments towards green investments by 2030.
At the opening of the Climate Investment Summit in Copenhagen earlier this month, Kent Damsgaard, CEO of Insurance & Pension Denmark (an institutional investment industry group), reported that Denmark’s pension funds have invested $8 billion in green projects since the 2019 Climate Action Summit in New York, where the initial commitment was announced.
These investments far exceed earlier predictions in a time of pandemic and general financial instability. If this pace continues, Denmark’s pension funds will reach their $50 billion green investment target three years ahead of schedule.
Also speaking at the Copenhagen summit, Finance Denmark CEO Ulrik Nødgaard announced an ambitious commitment to support private Danish citizens’ investments in the green transition.
Finance Denmark, an association for banks, mortgage institutions, asset management, securities trading and investment funds in Denmark, has declared that by 2030, CO2 emissions from investment funds offered to Danish citizens must be 75 percent below the emissions of the world equity index (MSCI ACWI) in 2020.
Danes have invested $160 million in funds offered by members of Finance Denmark. As a result of this new target, a considerable portion of funds available to Danish citizens now can be invested in companies that are currently (or in the process of becoming) green.
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