In the race to a net-zero and inclusive future, Canadian pension funds have a critical role to play - and a new report shows how
To seize this unprecedented opportunity, and maintain their tradition of excellence, Canadian pension funds must play a vital role in realizing a sustainable, inclusive future, says a landmark new release.
OTTAWA, Nov. 10, 2021 (GLOBE NEWSWIRE) -- In a fast-changing world where global investors are embarking on the largest reallocation of capital in history, pursuing sustainability and inclusivity offers social, environmental, and investment benefits. To seize this unprecedented opportunity, and maintain their tradition of excellence, Canadian pension funds must play a vital role in realizing a sustainable, inclusive future, says a landmark new release. This report emerges from a partnership between The Natural Step Canada, Smart Prosperity Institute, and Corporate Knights, and extensive collaboration with an independent advisory committee of Canada’s pension fund experts.
The Canadian Pensions Dashboard for Responsible Investing is a groundbreaking new tool showing how pension funds measure up on their Environmental, Social, and Governance (ESG) objectives. It sheds light on the current landscape of responsible investing in Canada, and makes an opening move that will help measure progress and navigate future decisions.
If Canada's $4 trillion pension sector aligned with net-zero, it could enjoy the immense commercial benefits, while helping to mobilize $140 billion of low-carbon investments per year. Likewise, there are potential financial costs to moving too slowly in this period of unprecedented capital reallocation from high-carbon to low-carbon activities. Recognizing that the global investment community, including Canadian pension funds, are already making great strides towards ESG objectives, the Dashboard reveals that sustainable investing is becoming a key strategy of Canada’s largest pension fund managers - with reported "green assets" now accounting for over $160 billion (7% of the examined funds’ total assets).
“As stewards of our retirement savings, pension funds have important roles to play in securing the future living standards of Canadians in a just and livable world.” said Keith Ambachtsheer, Director Emeritus, International Centre for Pension Management, Rotman School of Management, University of Toronto. “To that end, we should all welcome the Canadian Pensions Dashboard for Responsible Investing, which will provide important ongoing information on how effectively Canada’s pension funds are fulfilling their mission.”
The Dashboard promotes open dialogue to support a collective effort to reorient how capital is deployed. It presents a number of recommendations for governments, pension funds, and beneficiaries, offering a ten-point checklist that covers everything from net-zero commitments to pay ratios to diversity. Incorporating best practices from similar efforts in other countries, it will help fund decision-makers demonstrate credible progress, have more informed conversations with their beneficiaries and other key stakeholders, and help them raise the bar.
While the pensions sector still faces challenges in integrating sustainability, there are additional promising signals that sustainable investment is already gaining momentum both in Canada and around the world. On top of the COP 26 global talks’ focus on climate finance, UK MPs have recommended pension funds move to mitigate potential negative effects of a net-zero transition, Dutch civil service pension giant ABP announced it was divesting from fossil fuels, Canada’s “Big 6” banks have recently launched new net-zero commitments, and a series of other actions and climate pledges by Canada’s pension funds have recently come to the fore.
“When it comes to assessing and responding to risks we are accustomed to thinking backwards and in straight lines. Even the steep and exponential risk trajectories we are now challenged by seem linear when we look at a thin slice of them.” said Ed Waitzer, Lawyer and former Chair, Ontario Securities Commission. “Fortunately, our major public pension plans have a history, capacity and willingness to think ahead and react thoughtfully. Hopefully the Dashboard will encourage and assist them and other market participants to be proactive in responding to the increasingly existential sustainability challenges we all face together.”
For more information or to arrange an interview, please contact:
Mac Radburn, Smart Prosperity Institute, [email protected]
Available for interview:
Expert Advisory Panel Members
- Keith Ambachtsheer, Director Emeritus, International Centre for Pension Management, Rotman School of Management, University of Toronto
- Ed Waitzer, Lawyer and former Chair, Ontario Securities Commission
Report Authors
- Derek Eaton, Director of Public Policy Research and Outreach, Smart Prosperity Institute
- Toby Heaps, President & Founder, Corporate Knights
The Canadian Pensions Dashboard for Responsible Investing is a project of The Natural Step Canada and Smart Prosperity Institute in partnership with Corporate Knights, with support from the Trottier Family Foundation.
The full report and Dashboard are available online here: institute.smartprosperity.ca/pensions
About The Natural Step Canada
The Natural Step Canada is a national charity with over 25 years of experience advancing science, innovation and strategic leadership to foster a strong and inclusive economy that thrives within nature’s limits. We achieve this by engaging thought leaders from industry, government, academia and civil society through solution labs, coalitions and expert networks such as the Canada Plastics Pact, Circular Economy Leadership Canada, and the Energy Futures Lab.
https://naturalstep.ca/
About Smart Prosperity Institute
Smart Prosperity Institute is a national research network and policy think tank based at the University of Ottawa. We deliver world-class research and work with public and private partners – all to advance practical policies and market solutions for a stronger, cleaner economy.
https://institute.smartprosperity.ca/
About Corporate Knights
Corporate Knights is a media and ratings organization dedicated to advancing an economy that works for people and the planet.
https://www.corporateknights.com/
About The Trottier Family Foundation
The Trottier Family Foundation is a private Montreal-based foundation and one of Canada's leading funders in solutions that mitigate climate change, including initiatives that strengthen the sustainable finance ecosystem.
https://www.trottierfoundation.com/
