As part of the firm's Sustainable Investment Strategy, the updated Principles guide PSP Investments' active ownership efforts as long-term investors to contribute to a better total fund long-term risk/return profile, using engagement and voting activities to improve companies' climate change practices and disclosures.
PSP Investments has updated its Corporate Governance and Proxy Voting Principles ("Principles"), communicating its views on certain financial and sustainability matters. The Principles outline to the boards of directors and officers of the investee companies how PSP Investments is likely to vote on matters put to shareholders and communicate the firm's views on important financial and sustainability matters including those related to sound governance practices and climate change.
The updated Principles reinforce existing focus areas such as board composition and effectiveness and communicate our expectations for addressing climate change by explaining certain practices that would be in line with PSP Investments' Climate Strategy Roadmap and updated Sustainable Investment Policy.
"Our Climate Strategy Roadmap guides us to using our capital and influence to support the transition to net-zero global emissions by 2050," said Herman Bril, Managing Director and Head of Sustainability & Climate Innovation. "In updating our Principles, we are executing on our strategy, using proxy voting to promote corporate practices that address climate change, support transition plans and contribute to the long-term performance of the companies in which we invest."
Key climate-related aspects of the updated Principles include the following:
- Boards of directors are expected to ensure climate-related risks and opportunities are integrated into their strategy and operations.
- Companies are expected to be transparent about their approach to addressing climate-related risks and opportunities. As a supporter of the Taskforce on Climate-Related Financial Disclosures, PSP Investments encourages companies to report on climate change using this framework and generally supports shareholder proposals seeking enhanced climate-related disclosures.
- PSP Investments will encourage companies to increase the credibility of their transition efforts and expects a sound climate-related governance structure, accountability for oversight of climate commitments, a transition plan aligned with climate science, and enhanced disclosure of decision-useful information.
- On a case-by-case basis, and depending on its ownership position, PSP Investments will prioritize engagements to articulate its views on the global transition to net-zero emissions and to determine if management has the capacity and willingness to improve their climate-related management practices. Where boards fail to demonstrate adequate consideration of physical and transition-related impacts from climate change and to develop and disclose effective management plans in response to these risks, PSP Investments intend voting against Directors for accountability purposes to preserve long-term sustainable value.
"While our updated Principles are mainly intended for publicly listed companies, they also state that, when deemed appropriate, we apply them to guide our engagement with portfolio companies in our direct private market investments," added Bril.
PSP Investments strives to regularly review and update its Principles, ensuring a best-in-class approach that reflects evolving markets and corporate governance best practices. Our Sustainable Investment Policy and our Corporate Governance and Proxy Voting Principles can be consulted here.
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of Canada's largest pension investment managers with $230.5 billion of net assets under management as at March 31, 2022. It manages a diversified global portfolio composed of investments in capital markets, private equity, real estate, infrastructure, natural resources and credit investments. Established in 1999, PSP Investments manages and invests amounts transferred to it by the Government of Canada for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal 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: media@investpsp.ca
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