Engagement on ESG issues

In 2010, OPTrust made a strategic commitment to collaborate with other investors to engage with companies on issues of mutual concern. This approach offers OPTrust the opportunity to work with a range of partners to increase our leverage in addressing potential ESG risks.

Corporate engagement initiatives can span a continuum from exercising proxies, discussing ESG issues with investment managers, and engaging with corporate management and boards (either directly or in collaboration with other organizations) to sponsoring shareholder resolutions.

Principles for Responsible Investment

One example of this collaborative approach was OPTrust’s decision to become a signatory to the United Nations’ Principles for Responsible Investment (PRI) in 2010. The PRI is a network of international investors with more than 880 signatories worldwide, representing US$25 trillion in invested assets. As a signatory, OPTrust has committed to put the six Principles for Responsible Investment into practice.

1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.

These principles were developed by the investment community and provide a best practices framework for responsible investing. As a PRI signatory, we are also able to access a global network of organizations to share information and collaborate on engagement activities.

Carbon Disclosure Project

2010 also saw OPTrust join the Carbon Disclosure Project (CDP). The CDP is an international initiative that conducts an annual survey of thousands of the world’s largest companies regarding their greenhouse gas emissions and climate change strategies on behalf of more than 500 of the world’s leading asset owners and investment firms, with more than $64 trillion in assets under management. The companies’ responses and CDP reports assist OPTrust in evaluating investment risks and opportunities related to climate change.