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OMERS announces new social investment policy
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On Jan. 23, the fund announced the release of updated versions of both its Investment Practices and Proxy Voting Guidelines. The company said it expects companies to generate value for shareholders through sound corporate governance. OMERS is one of the first large Canadian pension plans to explicitly publish policies on socially responsible investment (SRI). OMERS updated Investment Practices document states that OMERS does not use social screens to select or reject investments, but that it encourages good corporate performance through shareholder advocacy. "As part of our due diligence in researching investments and monitoring performance, we take non-financial factors into consideration in terms of their potential impact on future returns," says the document. "Our focus is to encourage the adoption of high standards of behaviour as a means to maximize long-term shareholder value. We do not use social screens to reject companies considered to have unacceptable products or business practices, nor do we give precedence to non-financial considerations over risk and return considerations. Our fiduciary responsibility to our plan members comes first. "However, we firmly believe that corporations should account for their behaviour, and its implications for the creation of value. Shareholders have a right to know about the activities of the companies in which they invest. We support the notion that companies should publish and update in their annual reports their policies and procedures with respect to social, ethical and environmental issues that materially affect performance. We expect companies to disclose the steps taken to identify, assess and mitigate risks arising from these issues. "Where companies fail in their responsibilities and performance, OMERS may challenge the board of directors for answers through public and private meetings. Through our proxy voting guidelines, OMERS takes an active role in influencing corporate behaviour. We also support shareholder resolutions that require full and timely disclosure on activities considered to be injurious to the long-term creation of shareholder value." OMERS also states that it will consider investments that have non-financial benefits as long as they are consistent with good financial returns. "OMERS also realizes that rate of return for plan members and the creation of general economic value are not mutually exclusive. OMERS participates in various infrastructure projects and venture capital initiatives that provide broader benefits to our economy while generating the returns necessary to meet our fiduciary duty to our members." For more information, visit OMERS
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