The Social Investment Organization has called on Ontario to put in place rules to ensure transparency on socially responsible investment and proxy voting for pensions in the province.
In a brief Oct. 19 to the Ontario Expert Commission on Pensions, SIO argues that good fiduciaries are now expected to incorporate environmental, social and governance factors into investment management.
“Yet, in spite of the evidence about the importance of social and environmental factors, and the growing responsibility of fiduciaries to account for ESG factors, pension plan members still have no access to information on how their plans incorporate – or fail to incorporate – such strategies,” states the brief to the Commission, given the responsibility by the provincial government to review pension regulation in Ontario. “This is an important deficiency in pension plan accountability and transparency.”
The brief calls for regulations similar to those put in place in the United Kingdom in 2000 which require pension funds to disclose their SRI policies. The SIO also calls for rules requiring pensions to disclose their proxy voting policies and voting records.
“The fiduciary duty that pensions have to cast their votes appropriately is only meaningful if it is accountable, and the accountability mechanism is through the trustees that oversee the plans. Without disclosure of voting policies and records, pension plan members and their trustees have no way of knowing if plans are in fact acting according to their fiduciary duty when voting their shares. Transparency on voting policies and records is essential.”
The recommendations are similar to recommendations made by SIO in 2005 to Finance Canada’s consultation on federally-registered defined benefit pension plans.
To read a copy of the brief visit http://www.socialinvestment.ca/documents/PensionsOntarioExpertCommission1007Brief.pdf.
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