BCI Receives 2021 Pension Leadership Award for Sustainable Investing

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BCI recently announced it received the 2021 pension leadership award for sustainable investing:

We are honoured to share that BCI has been announced as the winner of the Sustainable Investing category for the 2021 Canadian Investment Review Pension Leadership Awards. The award recognizes leadership and/or significant progress incorporating sustainability into the investment process, including practices related to environmental, social, and governance (ESG) matters across asset classes.

“This recognition reflects the dedication of BCI’s teams to implementing our corporate-wide approach to ESG,” said Jennifer Coulson, senior managing director of ESG, public markets. “We are proud of our continued work with clients, portfolio companies, and other capital markets participants on the ESG issues most material to our clients’ investments.”

As a long-term investor, incorporating ESG considerations into our approach is an essential part of who we are and what we do. Among other factors, BCI was selected for the award based on:

  • Demonstrated corporate-wide commitment through our ESG Strategy and corporate ESG Working Group;
  • Development of our proprietary, in-house ESG Risk and Opportunity Framework which measures impacts of systemic ESG risks to the total portfolio;
  • Research with the University of Victoria and Pacific Institute for Climate Solutions on climate finance models and frameworks; and
  • Collaboration with global partners on the Sustainable Development Investments Asset Owners Platform, which uses an artificial-intelligence driven dataset to help investors and companies assess their contributions to the UN Sustainable Development Goals (SDGs).

“We are pursuing innovative solutions to understand and manage ESG risks and opportunities that are important for all long-term investors,” adds Adam Goehner, senior manager, ESG strategy & risk. “While BCI is focused on our own ESG initiatives, we collaborate with peers, industry, and academia to help advance the collective knowledge in emerging areas like climate finance and investor alignment with the SDGs which will benefit all investors in the long-run.”

Adam accepted the Pension Leadership Award for Sustainable Investing on behalf of BCI and participated on an ESG-focused panel at the Canadian Investment Review 2022 Global Investment Conference in April.

BCI has previously received recognition for our ESG approach and initiatives, including being selected for the 2021 Responsible Investment Association Leadership Award for Integration and earning a top spot on the Responsible Asset Allocator Initiative’s 2021 Leaders List of the 30 Most Responsible Asset Allocators.

You can learn more about BCI’s approach to ESG here.

First, let me congratulate Jennifer Coulson, senior managing director of ESG, public markets, Adam Goehner, senior manager, ESG strategy & risk and everyone at BCI for being recognized as leaders among pensions in sustainable investing. 

You can read the full coverage of the Pension Leadership Awards here.

BCI, Canada Pension Plan Investment Board and Pension Plan of the United Church of Canada were all finalists for the sustainable investing award.

As stated above, BCI has previously received recognition for its ESG approach and initiatives, including being selected for the 2021 Responsible Investment Association Leadership Award for Integration and earning a top spot on the Responsible Asset Allocator Initiative’s 2021 Leaders List of the 30 Most Responsible Asset Allocators.

I've covered Canada's most responsible asset allocators in 2021 here. I am very impressed with what all our large pensions are doing on responsible investing despite what critics claim. 

These days, the press is so negative on Canada's large pensions that we rarely hear about all the good things they are doing, especially when it comes to advancing sustainable investing.

Like what? Well, like today, I read CDPQ's real estate subsidiary, Ivanhoé Cambridge recently committed to the investment of the development of accommodation assets for people with disabilities in Australia with the investment in a Macquarie Asset Management managed platform:

The platform pursues investment opportunities in Specialist Disability Accommodation (“SDA”) assets, seeking to finance a growing portfolio of innovative and high-quality housing that is well integrated into urban communities.

Facilitate the provision of equitable accommodation for people with disability in Australia

Since the Federal Government announced support initiatives, enabling private sector funding to accelerate the growth of SDA, Macquarie Group financed a portfolio of SDA dwellings and built dedicated expertise and asset management capabilities.

“We are proud to invest alongside like-minded investors into such a unique project with high-impact and positive social outcomes”, commented Sunita Mahant, Head of Global Initiatives, Diversity, Equity & Inclusion at Ivanhoé Cambridge.

“This is a concrete illustration of one of our diversity, equity, and inclusion strategic objectives, which is to lead by example and influence the real estate industry as an investor driving change and choosing to build a more inclusive future by creating spaces where we all belong.”

Facing the shortage of SDA housing in Australia, the platform will continue to acquire new build dwellings to cater for individuals with “extreme functional impairment” or “very high support needs”. The strategy operates within Australia’s National Disability Insurance Scheme (“NDIS”), which seeks to support the provision of high-quality, purpose-built dwellings for around 6 per cent (~28,000) of the most vulnerable Australians by funding their accommodation.

Further diversification of Ivanhoé Cambridge’s portfolio to alternative sectors with favorable fundamentals in Asia-Pacific

The platform aims to increase the number of dwellings mainly in and near Australian mainland capital cities such as Sydney and Melbourne, diversifying its exposure into different SDA-built forms and partnering with an expanding network of SDA partners.

“The investment provides a unique opportunity for us to be a part of a program that seeks to improve the well-being of Australians living with disability through the provision of high quality and innovative dwellings that are well integrated into urban communities. Furthermore, it emphasizes our commitment to making impact-driven investments within the real estate sector”, commented Josephine Yip, Senior Director, Investment and Asset Management, Asia Pacific at Ivanhoé Cambridge.

All assets to be carbon neutral in operations

The platform expects to maintain high ESG credentials for the assets and is committed to carbon neutrality in operations – dwellings are highly energy efficient, as accredited by Nationwide House Energy Rating Scheme (“NatHERS”) – and participates in the Global Real Estate Sustainability Benchmark (“GRESB”).

Great platform, I hope Ivanhoé Cambridge and Macquarie Asset Management export it to other countries where governments see the merits of such a platform.

Remember, ESG isn't only about addressing climate change -- albeit this is the most pressing issue of our time -- it's also about nurturing a better, more diverse and inclusive society.

What can we learn from people with disabilities? Actually, you can learn a lot and I am shocked how few organizations have board members or employees with mild to more severe disabilities.

For example, it shouldn't surprise us to learn that 40% of Canadians would take less pay to work from home in a post-pandemic world

And yet organizations are still stuck with old mindsets.

Jane Thier of Fortune reports that JPMorgan and Goldman Sachs are monitoring how often employees are coming into the office—but experts say that approach could backfire:

Nicholas Bloom, economics professor at Stanford and co-founder of WFH Research, thinks the mere existence of these employee monitoring programs shows a real lack of foresight. 

“Women, people with disabilities, and people of color all have a preference for remote work—not only are Goldman and JPMorgan upsetting employees, they’ll face issues of diversity if they continue on this,” Bloom tells Fortune. “That’s just another cost I don’t think they’re aware of.”

Bloom argues that companies like JPMorgan, which are monitoring their unhappy workforce, haven’t clearly considered their end goal. Say a worker only comes in two days a week instead of the required three. HR discovers this by tracking swipes, and tells the worker’s manager. 

“Where does the manager go from there?” Bloom asks. 

They have two choices, Bloom says: They can ignore it, which would make it clear to employees that the rule has no teeth and ultimately makes management look weak. Option two: They start to penalize people and say, “I know you perform well and hit your targets, but your attendance isn’t good, so we’re slashing your pay.” 

“Obviously, that just pushes high performers out the door to your competitors," Bloom says. "Neither of those choices are appealing, so either way you execute, I don’t see how it’s a good policy.” 

Not for nothing, he adds, Goldman and JPMorgan are elite organizations. “Everyone there is super ambitious; they’re stars of their class, not slackers,” he says. “They’d generally do anything to improve their career. In-office mandates being unpopular should show that it’s not important.” 

I realize people get all wound up when it comes to the WFH-WFO debate but think about it, the pandemic proved beyond a shadow of a doubt that employees are able to remain highly productive and engaged working from home, so why take that option away from them?

I'm not saying people who are going to the office are wrong, it's great and their choice, but certainly don't penalize those that prefer working from home. That's just plain stupid, counterproductive and ultimately detrimental to your organization.

Also, there are legitimate reasons as to why “women, people with disabilities, and people of color all have a preference for remote work" and organizations need to really understand those reasons and be more accommodating.

Think about it: on the one hand organizations recognize that diversity in all its forms is unanimously good and on the other hand they're implementing policies that dissuade important groups from joining and thriving at their organization.

Again, makes no sense whatsoever. A CFO of a major company recently told me: "Our employees have nothing against coming to the office but they loathe commuting, they think it's a total waste of time, and openly state they want a lot more flexibility and the option to work from home or else they're leaving."

Anyway, ESG remains a huge focus at Canada's large pensions and I'm sure there are healthy internal debates going on in regards to all these issues I've raised above, including how to incorporate more people with disabilities into their workplace.

BCI is doing its part in advancing ESG investing within and outside its organization:

  • Demonstrated corporate-wide commitment through our ESG Strategy and corporate ESG Working Group;
  • Developed a proprietary, in-house ESG Risk and Opportunity Framework which measures impacts of systemic ESG risks to the total portfolio;
  • Research with the University of Victoria and Pacific Institute for Climate Solutions on climate finance models and frameworks; and
  • Collaborates with global partners on the Sustainable Development Investments Asset Owners Platform, which uses an artificial-intelligence driven dataset to help investors and companies assess their contributions to the UN Sustainable Development Goals (SDGs).

In short, ESG factors are at the heart of the BCI’s investing strategy.

Just keep in mind, ESG is still a work in progress and all of Canada's large pensions are doing more than their part when it comes to responsible investing.

Let me end by congratulating Deborah Ng, OTPP's former Head of Responsible Investing, for joining GMO as Head of Sustainability & Investing: 

Grantham, Mayo, Van Otterloo LLC (GMO), a global investment manager, is pleased to announce that Deborah Ng has joined the firm as Head of ESG & Sustainability.

In this role, Ng will be responsible for leading and accelerating the firm’s ESG and sustainability-related initiatives. Specific areas of focus will include working closely with the firm’s investment teams as they conduct innovative research and further integrate material ESG factors into their processes; partnering with members of GMO’s Investment Stewardship Group to expand issuer engagement activities; and advancing the firm’s own sustainability goals.

“Stewardship has always been an important part of GMO’s DNA. I strongly believe that how we incorporate ESG and sustainability is integral in generating outstanding investment results, effectively serving our clients and their missions, and helping build a more resilient and sustainable planet. We are delighted to welcome Deborah to the firm to lead us in these efforts. Her experience will be immensely valuable to GMO and our clients” said Chief Executive Officer Scott Hayward.

“This is an exciting time to join a leading investment firm like GMO with so many individuals that are passionate about contributing to the firm’s ESG and sustainability efforts. I look forward to partnering with all areas of the firm to drive these initiatives forward,” said Ng.

Ng joins GMO from Ontario Teachers’ Pension Plan, where she was most recently the Head of Responsible Investing, directing the plan’s responsible investing strategy and climate change initiatives. She currently sits on the Investment Committee of the United Church Pension Plan and is a past board member of the Global Real Estate Sustainability Benchmark (GRESB BV).

GMO is committed to continuing to expand its ESG and sustainability expertise and furthering the pioneering work Co-Founder Jeremy Grantham has conducted on these priorities. Investment solutions like the GMO Climate Change Strategy, launched in 2017, build on Grantham’s extensive research on climate change. In 2021 GMO published its inaugural Sustainability and Responsible Investing Report, detailing how the firm is applying its core values to today’s myriad challenges.

I met Deborah, Katharine Preston (OMERS) and other smart ladies at a Mont-Tremblant conference a while ago and was very impressed.

The fact that GMO has hired her as Head of Sustainability & Investing speaks volumes as to her talent and that of other women at Canada's large pensions which I consider global experts on sustainable investing.

Speaking of women, Caroline Codsi, Founder & Chief Equity Officer of Women in Governance, wanted me to plug their 2022 Annual Recognition Gala which will be held in Toronto on May 24th at the Ritz Carlton.

You can view details here and reserve here.

Please join her and enjoy this event if you can make it.

Below, an expert who helps guide ESG investing at a firm that manages nearly $200 billion in assets joins BIV's Women in Leadership series, sponsored by PwC. Jennifer Coulson is senior managing director of ESG at BCI. She and Shelley Gilberg, PwC Canada's leader of ESG markets and consulting, discuss environmental, social and governance-based investing with BIV executive editor Hayley Woodin. The conversation explores how ESG has evolved over the past decade, the impact of COVID and opportunities for responsible investment. 

Great discussion,  take the time to listen to Jennifer and Shelley as they outline the main ESG issues all investors face.

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