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SIO offers to work with the CPP Investment Board to strengthen social investment policy
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The Social Investment Organization has offered to work with the Canada Pension Plan Investment Board (CPPIB) to establish proxy voting policies to strengthen the Board's new social investing policy. The Board released its new policy in May along with a new website providing information on the Board's investment policies. The Board, which manages equity investments for the CPP, Canada's national public pension system, says that it believes that corporate social responsibility contributes to long-term returns. However, the policy rejects social and environmental screening and fails to include specific policies on how its intends to vote its shares on social and environmental issues. The Board said it will "generally support corporate policies and practices and shareholder resolutions that would result in the disclosure of information that could assist investors in assessing whether corporate behaviour was contributing to or detracting from long-term investment returns." Eugene Ellmen, executive director of the Social Investment Organization, said the SIO does not expect the CPPIB to adopt social and environmental screens because of the CPPIB's policy of investing broadly in the market. Social and environmental screens would be at odds with this policy. "However, we are disappointed that the Board failed to specify how it intends to cast its votes on issues of social responsibility and environmental sustainability," he added. "Socially responsible proxy voting is becoming much more commonplace in the pension sector and CPPIB risks falling behind other major pension funds in the area." Since CPPIB has the mandate to invest the retirement savings of Canadians generally through the Canada Pension Plan, SIO believes the Board should be a leader in this activity. "Canadians want their shareholdings to be voted in a way that improves corporate social responsibility, not just to stand by in the face of social and environmental problems," said Ellmen. SIO has indicated to CPPIB that it is willing to help the Board strengthen its proxy voting guidelines by reviewing current best practices in the area of socially responsible voting policies at other major pension funds. For more information, visit CPPIB
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