October 16, 2018 / News

$366bn pension earmarks gender diversity as priority

By Joe McGrath, ESG Clarity

The Canada Pension Plan Investment Board, which manages pensions for 20 million people, says it will target companies with poor gender diversity in the year ahead.

$366bn pension earmarks gender diversity as priority

One of the world’s largest pension funds has said gender composition of investee companies’ boards will be a priority for its sustainable investment strategy in the year ahead.

The Canada Pension Plan Investment Board, which manages some $366.6 billion in assets for more than 20 million people, said gender diversity issues in corporate governance will become the fifth area of focus for its sustainable investment strategy.

It joins Climate Change, Water, Human Rights and Executive Compensation as the group’s sustainability areas of focus.

“It’s crucial for companies in which we invest capital to assemble boards that reflect the full range of talent available,” Mark Machin, president & CEO of CPPIB, said in a media statement.

“If companies don’t take the required action to achieve the board effectiveness that today’s business environment requires, it falls to investors to provide a nudge, and when necessary, a push.”

The organisation said that in the 2017 proxy season, it voted at shareholder meetings for 45 companies where there were no female directors on the board, leading to nearly half of those businesses appointing at least one female over the following 12 months.

Separately, CPPIB’s annual investment report showed that it expanded its portfolio of renewable energy assets over the past 12 months , explaining that its investment teams believe this will improve risk adjusted returns. The group also became the first pension fund in the world to issue green bonds in 2018.

“We aim to be a leader among asset owners and managers in understanding the investment risks and opportunities presented by climate change,” Machin added.