A for Greens - Top marks on social, environmental and voting transparency
B for Bloc - Strong support for social and environmental transparency
B- for NDP - Support for voting transparency but off track on CPPIB
C- for Conservatives - Commitment to change unclear
D for Liberals - Unclear on policy direction

The Social Investment Organization has issued its ranking of the federal parties on the important issue of transparency and accountability in the investment and voting policies of Canada's national pension plans.
 
The investment and voting practices of mutual funds and pension funds are attracting growing attention worldwide because of the corporate scandals of the last few years. Investors are also demanding information on the social and environmental policies of their investments. Mutual funds in Canada are coming under increased scrutiny from provincial securities commissions; yet there are no provincial or federal regulations requiring pension funds to disclose information on these issues.

The SIO recently called on the federal government to introduce Right to Know regulations that would require national public and private pension funds to disclose their social and environmental policies, as well as their proxy voting policies and voting records.

During the current campaign, SIO sent questionnaires to the five major parties to obtain their policies on these issues. This is the second such survey issued by the SIO. In 2004 the Bloc, Liberals and NDP responded to a similar survey; the Conservatives failed to respond. This year, the SIO also included the Green Party. The responses by the five parties were graded by SIO Executive Director Eugene Ellmen and President Sucheta Rajagopal. Here are the results:
 
Green A
Bloc B
NDP B-
Conservatives C-
Liberals D

“SIO urges its members as well as concerned investors and pension plan members to make candidates aware of these issues,” said SIO Executive Director Eugene Ellmen. "Voters should also think about these issues as they cast their ballot on Jan. 23.”


Analysis

Of the five parties, the Greens have the clearest policy on the issue, and say they are prepared to act on it. The Green Party supports legislation for transparency on social and environmental policies, and mandatory disclosure of proxy voting policies and records.

The Bloc shows great understanding of the issue of social and environmental transparency, and reiterated its support for a Bloc-sponsored private members bill in 2001 to require federal pension funds to disclose their social and environmental policies. The government never brought the bill forward for passage. SIO marked down the Bloc however, because, in its response to the SIO questionnaire, it did not address the issue of mandatory disclosure of proxy voting policies and records.

The SIO gave marks to the New Democratic Party for its support of transparency and accountability on the issue of proxy voting.

However, the NDP lost marks with its opposition to the recently-announced Responsible Investment Policy of the Canada Pension Plan Investment Board, criticizing it for failing to screen out certain companies based on ethical guidelines. The SIO disagrees with the NDP on this issue. SIO welcomed the new CPPIB policy. While it does not call for screening, it does extend CPPIB’s activities in the area of research, corporate engagement and shareholder advocacy on corporate responsibility issues. As well, CPPIB discloses its social and environmental policies, as well as its proxy voting policies and records. These disclosures meet the SIO recommendations for private and public sector pension plans. As well, in its response, the NDP does not call for transparency on social and environmental issues among private and public sector pension funds.

The Conservatives state that social, environmental and ethical considerations should be taken into account in investment decision-making, and point to the CPPIB as a “best practices model.” However, the SIO marked down the Conservatives for failing to call for changes to require disclosure of social and environmental policies at private and public pension funds. In addition, the Conservatives say they support disclosure of proxy voting policies and records, but they are silent on the issue of whether they support regulatory or legislative change to require mandatory disclosure.

The Liberals achieved a failing grade. Their response focused entirely on the new CPPIB Policy. While expressing support for the Policy, the Liberals say nothing about requiring private and public pension plans to disclose their social and environmental policies. The Liberals state that proxy voting policies should be made available to pension plan members. However, the Liberals do not state that they would require mandatory disclosure of proxy policies. They also do not state that they would require mandatory disclosure of proxy voting records.

The SIO also marked down the Liberals for focusing entirely on the CPPIB Responsible Investment Policy. While the policy can be held up as a model, SIO feels it is inappropriate for the governing party to take credit for the new policy, since the CPPIB and the government both state that the CPPIB is an arms length agency of the government and is not subject to government policy.

A full copy of the SIO's letter to the parties and their responses is available at: http://www.socialinvestment.ca/News&Archives/FederalPartiesQuestionnaireResults2006election.pdf