PSP Investments’ 2022 Responsible Investing Report Shows Continued Momentum on Climate Change Commitments, Data Integration and Active Ownership

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Strong points:

  • Exposure to green assets increased by $6.2 billion at $46.5 billiondriven, in part, by new climate-aligned investments

  • Companies representing 42% of our portfolio carbon footprint now report GHG data, a 14% increase in data coverage over last year

  • Climate disclosures made on the basis of the main recommendations of the Task Force on Climate-related Financial Disclosures

  • Committed to 811 listed companies on key ESG issues and voted at 5,837 general meetings on 58,678 resolutions, with 21% of votes against management mainly related to issues of board composition

MONTREAL, November 10, 2022 /PRNewswire/ — The Public Sector Pension Investment Board (PSP Investments) today released its annual Responsible Investing Report, which outlines how the organization seeks to integrate environmental, social and governance (ESG) in its investment practices. The accompanying reports also include PSP Investments’ climate-related financial disclosures based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).

“Given our long-term horizon, sustainability factors are inextricably linked to our ability to achieve our investment objectives,” said Deborah Orida, President and CEO, PSP Investments. “I look forward to working with colleagues across our organization to deepen and leverage our sustainability expertise to make the most informed investment decisions for pension plan contributors and beneficiaries. retreat that we support.

The 2022 Responsible Investing Report provides updates on PSP Investments’ inaugural climate strategy roadmap, including key achievements and priorities moving forward. PSP Investments’ approach to climate change continues to strengthen and evolve, seeking to become increasingly data-driven, linked to asset-level value creation and technology-enabled in our due diligence and engagement workflow.

“As the world grapples with the lingering pandemic, mounting pressure from climate change and other disruptive forces that critically intersect with geopolitics and affect society and the economy – we believe it is more important to consider material ESG risk factors and opportunities in our decision-making than ever,” said Edouard van GelderenSenior Vice-President and Chief Investment Officer at PSP Investments.

Among the major milestones achieved in fiscal year 2022:

Climate strategy

  • Launch of a climate strategy that defines emission reduction targets for all investment portfolios, which we believe are ambitious but achievable. Through its investment and engagement efforts, PSP Investments aims to reduce portfolio GHG emissions intensity by 20-25% by 2026, relative to a 2021 baseline.

  • Publication of a comprehensive framework for green bonds and publication of a C$10.0 billion green bonds, the first-ever issuance of this type of PSP, to finance specific climate and environmental projects and to meet growing investor demand for sustainable products. The framework has been awarded an environmental rating of “average green” and the highest possible governance score of “excellent” by CICERO Shades of Green.

  • Development of a bespoke green asset taxonomy to better assess portfolio exposure to different types of climate-related investments and to support the transition to net-zero global emissions by 2050. The taxonomy is a quantitative framework and qualitative assessment based on the carbon of the beneficiary companies. intensity and an assessment of the credibility of their transition plans.

  • Improved disclosure of how PSP Investments manages financial risks related to climate change and responds to opportunities, based on TCFD recommendations. For the first time, PSP Investments is disclosing a measurement of portfolio-funded emissions, informed by guidance from the Partnership for Carbon Accounting Financials (PCAF), and drawing on emerging innovations and best practices.

A data-driven approach

  • Development of the ESG Composite Score, a proprietary scoring system designed to enable the quantitative assessment and monitoring of a [portfolio] company performance on key ESG considerations.

  • Significant increase in self-reported GHG data available from PSP Investments portfolio companies, which was essential for developing climate strategy and setting emission reduction targets.

  • Introduction of fund-wide ESG KPIs to track progress in the areas of climate change, diversity and inclusion, business ethics, cybersecurity and data privacy , and human capital management.

Create value through active ownership

  • Engage with 811 listed companies on key ESG issues, to encourage responsible business practices. Of the various commitments, 346 had climate-related objectives.

  • Voted at 5,837 general meetings on 58,678 resolutions. About 21% of votes were against management, mostly related to board diversity.

  • Completed 14 cybersecurity assessments of PSP Investments portfolio companies to help these companies protect themselves against cybersecurity risks.

“As a long-term investor, we believe that promoting sustainability adds value to our investments. We are working with our partners and our portfolio companies to consider their environmental and social impacts in managing these investments,” said Herman Bril, Managing Director and Head of Responsible Investment at PSP Investments. “By actively seizing this opportunity, we believe we can support the achievement of our mandate.”

To read PSP Investments’ 2022 Responsible Investing and TCFD Reports, visit our website here.

About PSP Investments

The Public Sector Pension Investment Board (PSP Investments) is one of the from Canada leading pension investment managers with $230.5 billion net assets under management at March 31, 2022. It manages a diversified global portfolio consisting of investments in capital markets, private equity, real estate, infrastructure, natural resources and credit investments. Established in 1999, PSP Investments manages and invests the amounts transferred to it by the Government of Canada for federal public service, Canadian Forces, Royal Canadian Mounted Police and Reserve Force pension plans. Headquartered in Ottawa, PSP Investments has its main business office in Montreal and offices in New York, London and hong kong. For more information, visit investpsp.com or follow us on Twitter and LinkedIn.

Media Contact: Maria Constantinescu, PSP Investments, Phone: (514) 218-3795 | 1 844 525 3795, Email: [email protected]

SOURCE PSP Investments

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