TORONTO, June 01, 2022 (GLOBE NEWSWIRE) -- In the new white paper from the Association of Canadian Pension Management (ACPM), Fiduciary Considerations Relating to Environmental, Social & Governance Issues for Canadian Retirement Arrangements, ACPM examines how pension plans should consider ESG risks and implement an appropriate ESG strategy.
The administrators of Canadian pension plans are fiduciaries with significant duties that include investing pension fund assets so that pensions are secure and provide the promised benefits. How pension plans can, and should, account for ESG risks in light of the fiduciary duties applicable to pension fund investing is an issue that pension plan administrators globally are struggling to manage. Environmental factors may include elements such as greenhouse gas emissions, water/land use and waste, while social factors might include workforce diversity and safety management, and relevant governance considerations might be structure, oversight, and reporting. Volatile interest rates, pandemics, longevity, inflation, currency fluctuations, geopolitical issues, and a wide variety of other risks, such as climate change, make the fiduciary’s task even more challenging.
There is a growing awareness that sustainable investment, including attention to ESG factors, can form part of responsible investment practices as well as the recognition that certain investment risks are becoming more acute. According to Statistics Canada, the market value of assets held by Canadian trusteed pension funds were approximately $2.14 trillion as of May 2022 and therefore these are material assets in the Canadian economy. Moreover, the federal government has announced its intention to move forward with requirements for disclosure of environmental, social, and governance (ESG) considerations, including climate-related risks, for federally regulated pension plans.
Fiduciary Considerations Relating to Environmental, Social & Governance Issues for Canadian Retirement Arrangements identifies several recommendations for ESG legislation, regulation and reporting that would provide more clarity for pension plans in this evolving and complex area of plan management.
ACPM is the leading advocacy organization for a balanced, effective and sustainable retirement income system in Canada and our membership manages retirement plans for millions of plan members.
For further information or to schedule an interview, please contact:
Lorianne Weston, Manager of Advocacy and Communications, ACPM;
Lorianne.weston@acpm.com | 416-964-1260 x225 | www.acpm.com
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