At PSP Investments, we believe that responsible corporate behaviour with respect to environmental, social and governance (ESG) factors generally has a positive influence on long-term financial performance.
We take a pragmatic view when applying our approach to responsible investing. This approach is tailored to local social and legal environments, and to the commercial imperatives of the companies in which we invest. We expect these companies to comply with the legal and regulatory regimes applicable to them.
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At PSP Investments, we know that environmental, social and governance (ESG) factors have a direct impact on both risk and long-term profitability.
If there is one takeaway from this report, it is that responsible investment is at the very core of our investment strategy.
Our responsible investment approach is aligned with our total fund perspective. It is rooted in the belief that good corporate conduct and strong governance enhance long-term financial performance. Our approach is inspired by our shared purpose to act in the best interests of pension plan contributors and beneficiaries – the men and women who have served Canada throughout their careers.
As in our business strategy, we count on our partnerships with like-minded organizations for responsible investment success. Our definition of success goes beyond mere financial considerations. It means acting as a corporate steward to create long-term, sustainable value for all of our stakeholders.
We approach ESG from a double-edged perspective: risks and opportunities. Rather than simply noting investment risks in our assessments, we view them as value-creation opportunities, and we work closely with our partners to unlock the value they present.
I encourage you to read about our many important successes throughout fiscal year 2017, from supporting a major oil and gas company to enhance transparency, to helping to improve the health and safety practices of an Asian semiconductor manufacturer. You will also discover how we work with many world-class ESG-related associations, such as the UN-supported Principles for Responsible Investment and the Canadian Coalition for Good Governance.
To fulfill our responsible investment mandate, in the last fiscal year, we built a dedicated seven-member team. Led by Stéphanie Lachance, Vice President, Responsible Investment, the team is housed within the Chief Investment Officer Group for a clear view across the organization. It analyzes investments and works with all of our asset classes to manage ESG factors. This supports our belief that, as a long-term investor, establishing strong responsible investment oversight is not only necessary for value creation — it is the right thing to do.
I would like to thank the Responsible Investment group for their invaluable contribution to our organization, and I would like to thank all employees for their continued commitment to helping PSP Investments incorporate ESG into all of our activities.
André Bourbonnais President and Chief Executive Officer