Investors push business on climate change
In a recent move, seventeen leading institutional investors pushed hard for a meeting with the board of ExxonMobil to discuss the company’s strategies for climate change.
The group, all members of the Investor Network on Climate Risk (INCR), includes major pension funds and other institutional financiers controlling $658 billion in assets. They were concerned with the financial impacts of ExxonMobil’s operation as “a company that fails to acknowledge the potential for climate change to have a profound impact on global energy markets, and which lags far behind its competitors in developing a strategy to plan for and manage these impacts.”
The Canada Pension Plan (CPP), Canada’s largest public investor, is a participant in the INCR, but is not a formal signatory and therefore not directly involved in engagement activities.
CPP holds $500 million worth of ExxonMobil stock, its single largest foreign equity holding. CPP Investment Board (CPPIB) Vice President of Communications and Stakeholder Relations Ian Dale said that while the Board is not participating in this specific initiative, they are developing shareholder engagement strategies in support of its own recently unveiled Policy for Responsible Investment.
“We have started using engagement as a tool, and are in the process of determining focus areas where we can be most effective”, he said. CPPIB recently hired a Responsible Investment manager to work specifically on this area, noted Dale.
“The CPP fund has $57 billion invested in equities, and we are investing this fund for generations, so we take a very long term point of view, and that’s why we view our Responsible Investment approach as a long term strategy. Given that engagement can take some time to bear fruit, we are committed to using it as a tool to support our investments,” he added.
The Canada Pension Plan Investment Board is also a signatory to the largest ever investor initiative on climate change, the Carbon Disclosure Project 4 (CDP4). This project, a coalition of 211 investors representing over $31 trillion of assets under management, recently sent questionnaires on climate change strategies to 1800 companies worldwide, including 300 of the most valuable firms in Canada based on market capitalization.
The CDP 4 survey results for Canada will be evaluated by the Conference Board of Canada in cooperation with the CDP Secretariat. A final report will be released in September.
Other Canadian investors who participated in the survey include: the British Columbia Investment Management Corporation, Ontario Teachers Pension Plan, Ontario Municipal Employees Retirement System, Scotiabank, Canadian Imperial Bank of Commerce and BMO Financial Group.