As a major Canadian institutional investor, OPTrust recognizes that environmental, social and governance (ESG) concerns have the potential to affect the Plan’s investment performance. We have therefore developed and implemented a number of measures to identify, address and manage ESG-related issues as part of our investment activities.
In 2010, OPTrust made significant progress in the implementation of its Statement of Responsible Investing Principles (SRIP), which was approved by the Board of Trustees in 2009. The SRIP, which applies to all of OPTrust’s assets, is an expression of our support for high standards of corporate governance, our strong record of shareholder voting and our continuing efforts to promote the integration of environmental, social and governance factors into the management of each of our investment portfolios.
As part of the SRIP implementation process, OPTrust conducted a review of our various public equity portfolios to identify companies that may have exposure to financial, reputational or other risks arising from ESG issues. We then used the results of this review to engage our external investment managers on how these issues are reflected in their decision-making process.
During the year, we continued to build on our Real Estate Group’s work to achieve BESt (Building Environmental Standards) certification from the Building Owners and Managers Association of Canada (BOMA) for Canadian properties directly owned by the Trust. By the end of 2010, we had achieved certification for 54%, by value, of our directly-owned Canadian real estate portfolio, up from 36% in 2009.
OPTrust’s Private Markets Group continued to boost the Plan’s investments in renewable energy projects in our infrastructure portfolio. Investments in these regulated assets support our SRIP, contributing to, and benefiting from, global efforts to reduce carbon emissions and other pollutants associated with many traditional sources of energy.
In 2010, OPTrust announced an investment in Partnership for Renewables (PfR), an innovative joint venture in the United Kingdom. PfR funds and develops wind farms on public lands, helping public sector bodies access the economic and environmental benefits of renewable energy projects, without diverting public resources away from frontline services. In Canada, OPTrust is investing in small-scale renewable energy developments, bringing clean power and local economic development opportunities to communities in Nova Scotia and Ontario.
OPTrust also continues to participate in a number of coalitions and organizations that seek to promote sound corporate governance, shareholder advocacy and responsible investing activities in Canada and around the globe.