PSP Investments' 2023 Sustainable Investment Report outlines progress on top sustainability priorities
Highlights:
- Achieved target to increase investments in transition assets to $7.5 billion ahead of 2026 schedule.
- Reported Scope 1 and Scope 2 GHG data for assets in-scope climbed from 47% in fiscal year 2022 to approximatively 54% in fiscal year 2023.
- Further embedded our understanding of sustainability-related risks and opportunities into our culture, operations and investment practices to enhance our long-term sustainable investment approach.
- Strengthened our approach to sustainability and climate by updating our Sustainable Investment Policy and Corporate Governance and Proxy Voting Principles.
- Increased partnerships with institutional investors, industry associations and NGOs highlight our focus on engagement and collaboration.
MONTRÉAL, Sept. 14, 2023 /PRNewswire/ -- The Public Sector Pension Investment Board (PSP Investments) today published its annual Sustainable Investment Report, which outlines how the organization is striving to embed sustainable investing into its culture, operations and investment activities to continue to advance capabilities and address emerging risks and opportunities. Accompanying reporting includes PSP Investments' climate-related financial disclosures based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
"In a year marked by challenges and uncertainty for investors, PSP Investments continued to deliver resilient long-term financial results and advance its capabilities to address emerging risks and opportunities," said Deborah K. Orida, President and Chief Executive Officer at PSP Investments. "We aspire to develop additional foresight on the structural changes that will impact investments over the long term. This will include our evolving insights on climate, biodiversity, and the impact of social matters on our license to operate."
The report outlines PSP Investments' progress on the organization's top sustainability priorities, including performance toward fiscal 2026 climate targets, the integration of material sustainability factors into decision-making and evolution of the approach. The climate-related financial disclosures showcase progress on metrics and targets; introducing our first-ever data quality assessment using the Partnership for Carbon Accounting Financials (PCAF) methodology; and present the progress made on the approach and implementation of our Green Asset Taxonomy.
"As a pension investor, one of our core investment beliefs is that identifying, monitoring, integrating and capitalizing on material emerging factors contributes to long-term investment performance and to our ability to deliver on our mandate," said Eduard van Gelderen, Senior Vice President and Chief Investment Officer at PSP Investments. "Our 2023 Sustainability Investment Report showcases the progress we are making in translating this belief into concrete actions and measurable outcomes."
Fiscal 2023 highlights include:
Acting on climate change
- Identified more eligible transition assets in our portfolio than anticipated when we first implemented our Green Asset Taxonomy, enabling us to reach our target of increasing investments in transition assets to $7.5 billion earlier than expected.
- Expanded the scope of application of our Green Asset Taxonomy to include listed corporate bonds and applied more stringent criteria for green assets in public and private markets.
- Published a Green Asset Taxonomy white paper in effort to increase transparency and promote market convergence.
- Released our inaugural Green Bond Impact Report, which is linked to the issuance of our first green bond of $1 billion in fiscal 2022.
Continuing to expand our data capabilities
- Rolled out an inaugural total fund sustainability-related data collection process, covering key performance indicators in the areas of climate change, diversity, equity and inclusion (DE&I), business ethics, cybersecurity and data privacy, and human capital management.
- Carried out an asset-level GHG data collection initiative with local operating portfolio company partners in six countries, covering over three million hectares of farmland and timberland across more than 400 individual properties.
- Created sustainability due diligence tools to help our investment professionals integrate material sustainability-related considerations into their investment processes.
Advancing our sustainable investing approach
- Updated our Sustainable Investment Policy and Corporate Governance and Proxy Voting Principles, further embedding our approach to sustainability and climate into our investment and active ownership activities and enhancing our expectations with respect to corporate governance and public disclosures on climate change risks and opportunities.
- Introduced a hub-and-spoke model for integrating material sustainability factors into our investment process, providing our investment teams with tools, resources and training that will ultimately enable them to take on greater responsibility for this activity.
- Leveraged our cross-asset class Climate Investing Workgroup to advance collaboration on climate investing opportunities across PSP Investments and build knowledge on key climate investing themes.
Continuing to create value through active ownership
- Over the past fiscal year, PSP Investments has, where appropriate, engaged with 860 publicly listed companies whose securities it holds. This was done either directly with the company, with the assistance of a global stewardship service provider, or, where appropriate, in collaboration with like-minded investors or organizations such as the Canadian Coalition for Good Governance.
- In fiscal year 2023 PSP Investments voted at 5,760 meetings on a total of 58,872 management and shareholder resolutions.
"PSP Investments has developed a holistic approach to sustainable investing, leveraging our capital, influence and capabilities to preserve and enhance long-term value," said Herman Bril, Managing Director and Head of Sustainability and Climate Innovation at PSP Investments. "A strong focus on materiality enables us, as investors, to better understand the potential impact of sustainability-related factors on financial performance and to make informed investment decisions that support long-term value creation."
To read PSP Investments' 2023 Sustainable Investment and TCFD reports, visit our website.
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of Canada's largest pension investors with $243.7 billion of net assets under management as of March 31, 2023. It manages a diversified global portfolio composed of investments in capital markets, private equity, real estate, infrastructure, natural resources, and credit investments. Established in 1999, PSP Investments manages and invests amounts transferred to it by the Government of Canada for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York, London and Hong Kong. For more information, visit investpsp.com or follow us on LinkedIn.
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