The Ontario Teachers’ Pension Plan (OTPP) has joined 15 other Canadian asset owners and become a recent signatory to the United Nations-backed Principles for Responsible Investment Initiative (PRI).
OTPP, which is regarded as a leader in corporate governance issues, is a relative latecomer to the PRI, with the organisation already attracting 916 signatories world wide since it was launched in 2006 . President and chief executive officer Jim Leech (pictured) says that many of its investment practices are already aligned with the principles.
“Our investing practices were already aligned with most of the principles and PRI reflects the increasing importance of responsible investing to our members and potential partners,” Leech says.
“As a natural extension to our long record of leadership on matters of corporate governance, PRI is consistent with our core values of championing accountability and risk consciousness.”
With $107.5 billion in assets as of December 31, 2010, Teachers’ is the largest single-profession pension plan in Canada. It invests the pension fund’s assets and administers the pensions of 295,000 active and retired teachers in Ontario.
OTPP says it attempts to integrate environmental, social and corporate governance (ESG) factors into its risk management processes and is also a signatory to the Carbon Disclosure Project and the Water Disclosure Initiative.
The fund’s largest timberland investment manager also participates in the Sustainable Forests Forestry Initiative.
Its corporate governance work has been its most significant contribution to the development of ESG policies and practices among institutional investors.
This has included being a founding member of the Canadian Coalition for Good Governance.
The fund has a policy of voting at every opportunity it has as a shareholder and publishes an annual letter to the companies it invests in outlining its corporate governance views.
Along with these initiatives, OTPP publishes all its voting records on its website.
The fund also uses research providers Sustainalytics and MSCI ESG research to analyse environmental, social and corporate governance risks for companies in major stock indices.
Leech says that the fund will look to share its own ESG experience with other funds involved in the PRI.
“We are pleased to endorse PRI and look forward to sharing best practices and collaborating with like-minded investors from around the world as we analyse the financial implications of ESG risks and opportunities,” he says.
Approximately 900 investment institutions and service providers, with assets under management of approximately US$25 trillion, have become signatories.
The fund has recently outlined its responsible investing principles and policies through publishing a video, Responsible Investing – An Evolving Story, on its website.