Environment
We believe that companies that effectively manage environmental, social and governance (ESG) risks and opportunities will be better positioned to succeed in a rapidly changing world. We also believe that addressing important sustainability challenges, such as climate change, will present unique investment opportunities as entire sectors transform to meet these challenges.
Both OPB and our investment manager, the Investment Management Corporation of Ontario (IMCO), are working to incorporate sustainability through ESG considerations, including climate change, into our operations and investment approach. We believe that by considering ESG in its investment approach, IMCO can better manage potential investment risks and identify opportunities to create long-term value.
What Is ESG?
As a pension plan administrator, OPB focuses on ESG risk management, both within our organization and our investment portfolio. Below are examples of some of the issues that fall under each ESG pillar.
- Environmental: Climate change, energy, water, waste and pollution, biodiversity
- Social: Diversity, equity and inclusion, health and safety, human rights, human capital management, supply chain management
- Governance: Board structure, diversity and independence, business ethics, executive compensation, accounting and audit quality, risk management,
Managing our environmental impact
OPB believes that effectively managing climate-related risks is integral to our long-term sustainability and value for our members. Our most significant contribution to addressing climate change lies in IMCO’s prudent management of our investment portfolio, focusing on mitigating risks and capitalizing on financial opportunities associated with the transition to a low-carbon economy. We also aim to consider the environmental impact of our administrative operations, where possible.
Our IMCO partnership
As an asset owner, OPB collaborates closely with IMCO while monitoring all aspects of its investment performance. While OPB has delegated the responsibility for considering ESG factors when making and managing the Plan’s investments, it regularly engages with and actively monitors IMCO’s performance, so the assets are invested in a manner that sustains the long-term financial health of the Plan.
With the advice of IMCO, OPB determines the allocation of our capital to various asset classes. IMCO then invests based on an investment management agreement and in accordance with our Statement of Investment Policies and Procedures (SIP&P).
We believe in the benefits of active ownership. We expect IMCO to not only integrate ESG considerations in the investment process, but also to influence investee companies through engagement and proxy voting to improve corporate practices and to manage investments with potential ESG risks. We also expect IMCO to consider divesting from investments where insufficient action is taken following engagement.
Related resources
Climate
Learn more about OPB's approach to climate change.
Read More Climate