Water is the latest focus area for the Canadian Pension Plan’s responsible investing initiative, with the fund planning to target big Canadian and global companies this year to gather information on their water usage.
According to the fund’s latest report on responsible investing, water usage will be an increasingly important environmental, social and governance (ESG) concern.
“In recognition of this, the CPP investment board will be adding water as a focus area for engagement in the coming year (2010-2011),” the report says.
“Our initial efforts in this area include becoming a signatory to the Carbon Disclosure Project (CDP) Water Disclosure initiative in March 2010. The CDP Water Disclosure initiative is backed by 137 financial institutions globally with a combined US$16 trillion in assets.
“The objective of this initiative is to collect water-related data from the world’s largest corporations on behalf of investors. The CDP Water Disclosure initiative has asked 302 of the largest global companies, including those in the oil and gas, utilities and mining sectors, to report on water-related risks and opportunities.”
The CPP Investment Board, which is mandated to invest the assets of the $129.7 billion CPP, says it will include targeting Canadian and international holdings in high-impact sectors through “direct and collaborative engagement”.
The report says the fund will seek disclosure on material risks related to water, and assurance that companies are managing longer-term risks.
The CPP introduced its responsible investing policy in 2005. It has ascertained, through a study by the Canadian Government actuary, that the fund itself is sustainable for at least 75 years.
Previously announced focus areas of potential ESG risk for the fund include climate change, executive compensation and the extractive industries.
PThee CDP Water Disclosure initiative has asked 302 of the largest global companies