How Large Canadian Public Pension Funds Approach Sustainable Investing
DBRS Morningstar released a commentary titled “How Large Canadian Public Pension Funds Approach Sustainable Investing.” As large capital allocators with a long-term horizon, the large Canadian public pension funds (Pension Funds) will play a key role in fostering the advance on environmental, social, and governance (ESG) matters for the broader interest of society, however their role will be guided by their fiduciary duty to their members and clients.In this commentary, DBRS Morningstar explores the following:
(1) The Pension Funds are committed to seriously pursuing ESG outcomes. They have been focusing on the impact of climate change on their investments and in facilitating the transition to a low-carbon economy as well as governance, however, social factors are also gaining traction as these issues are becoming more relevant to society.
(2) Although the Pension Funds consider the values and interests of their stakeholders and of society in general when making decisions, their mandates require them to maximize risk-adjusted returns having regard to the plan's long-term obligations or, in the case of asset managers, to their client's liabilities. This fiduciary duty comes first and it is at the forefront of their investment decisions and is expected to guide their capital allocations toward those investments that are sustainable in the long term and that generate better risk-adjusted returns.
(3) The Pension Funds are pursuing ESG goals in multiple ways and their market clout can have a material impact. They have overarching strategies to integrate ESG issues into their investment decision-making, that include incorporating ESG factors as a source of risks and opportunities in their investment analysis, engaging with partners and portfolio companies to promote sustainable investments, staying abreast of best ESG practices, and exercising influence and collaborating with like-minded investors and organizations to promote positive changes related to ESG issues.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.