On BCI's 2021 ESG Annual Report

BCI recently released its 2021 ESG Annual Report:

Today, British Columbia Investment Management Corporation (BCI) published our 2021 ESG Annual Report, an in-depth look at how we capture opportunities and manage risks associated with environmental, social, and governance (ESG) matters on behalf of our clients. The report is supported by a supplementary document that provides additional case studies.

“Addressing climate change and ESG issues is not only a source of potential investment opportunities, it also allows us to manage long-term financial risks,” said Gordon J. Fyfe, chief executive officer and chief investment officer of BCI.

“At BCI, we are guided by our fiduciary duty to clients and our organizational purpose of helping hundreds of thousands of British Columbians secure a strong financial future. The people we are serving include our children’s teachers, our health care providers, our municipal workers, and our neighbours.”

Expanding BCI’s ESG activities from a predominantly risk-mitigation approach to one that includes ESG as a source of long-term value creation remains a corporate priority. This year’s report demonstrates our progress and work under the four components of our corporate-wide ESG Strategy: Integrate; Influence; Invest; and Insight.

BCI is committed to incorporating the Task Force on Climate-related Financial Disclosures (TCFD) recommendations into our reporting and disclosure practices. Our 2021 ESG Annual Report includes our TCFD-aligned reporting and a feature on BCI’s climate action journey over more than two decades. We will release an update to our Climate Action Plan in late 2022.

2021 ESG Highlights: 


  • Continued to expand the application of our ESG Risk and Opportunity Framework, which evaluates climate-related impacts to the total portfolio over time; BCI received the Responsible Investment Association (RIA) Leadership Award for Integration for our framework and it was featured as a Principles for Responsible Investment (PRI) case study
  • Conducted ESG reviews of all private equity general partners using our corporate-wide ESG Evaluation Framework for External Managers; 98 per cent have an official ESG policy and evidence of ESG integration
  • Developed a custom ESG dashboard to support our internal active emerging markets team, empowering investment staff and maximizing efficiency of our ESG resources


  • Engaged 299 companies in public markets, including through four collaborative engagement initiatives focused on climate change, human capital management, and gender diversity
  • Participated in 20 ESG-related policy consultations, roundtables, and joint statements, including the Canadian Investor Statement on Climate Change
  • Joined more than 100 general and limited partners in committing to the ESG Data Convergence Initiative, which aims to improve the quality and availability of private company data
  • Updated our ESG engagement key performance indicators for our public markets program to reflect positive trends and changing priorities; we now track five categories and over 60 data points


  • Participated in 37 sustainable bond issuances valued at over $1.7 billion, increasing total historical participation to more than $2.5 billion
  • Invested in the First Nations Finance Authority’s new commercial paper program, bringing total historical participation to over $750 million
  • Increased assets under management in our Global Quantitative ESG Equity Fund and Thematic Public Equity Fund, reflecting intentional allocations to these mandates and generating strong returns
  • QuadReal Property Group successfully completed its second green bond issuance in 2021, and third green issuance in February 2022, for a total of nearly $1.2 billion raised to date


  • Partnered with the University of Victoria and Pacific Institute for Climate Solutions to co-develop new climate finance tools over the next three years
  • Researched emerging trends on the opportunities that ESG presents as a source of value creation
  • Provided education and training opportunities to BCI staff, clients, and board members on topics such as climate change, Indigenous reconciliation, and labour relations

In 2021, BCI received a top spot on the Responsible Asset Allocator Initiative’s Leaders List of the 30 Most Responsible Asset Allocators, the RIA Leadership Award for Integration, and the Canadian Investment Review’s Pension Leadership Award for Sustainable Investing. This recognition reflects the increasing sophistication of our approach, and our commitment to driving positive ESG performance in our portfolio and through the broader capital markets.

Read our 2021 ESG Annual Report 

Read our 2021 ESG Annual Report: Supplementary Case Studies

British Columbia Investment Management Corporation (BCI) is amongst the largest institutional investors in Canada with $211.1 billion under management, as of March 31, 2022. Based in Victoria, British Columbia, with offices in Vancouver and New York City, BCI is invested in: fixed income and private debt; public and private equity; infrastructure and renewable resources; as well as real estate equity and real estate debt through our independently operated platform company QuadReal Property Group. With our global outlook, we seek investment opportunities that convert savings into productive capital that will meet our clients’ risk and return requirements over time. This compels us to integrate long-term ESG matters into all investment decisions and activities. BCI’s clients include pension plans representing over 715,000 plan members, insurance funds providing more than three million Autoplan insurance policies annually, benefits coverage to more than two million workers and 225,000 companies, and special purpose funds within BC’s public sector. Founded in 1999, BCI is a statutory corporation created by the Public Sector Pension Plans Act.

Take the time to read BCI's 2021 Annual ESG report here and the supplementary case studies here

The ESG report is extremely well written and comprehensive, totaling 64 pages in all, packed with excellent insights on how BCI is addressing climate change risks and opportunities, promoting diversity, equity and inclusion and there are many case studies embedded in the report.

It is beyond the scope of a blog comment to cover this report in detail which is why I recommend reading it very carefully but I think it is worth covering important parts.

Let me begin with a message from BCI's CEO/ CIO, Gordon Fyfe, at the top of the report:

The world has certainly changed in the past two years, with some shifts being only temporary, while others can be considered permanent.

Even though many of us paused daily activities, the collective urgency to address climate change continued. Recent reports from the Intergovernmental Panel on Climate Change and the UN Climate Change Conference (COP26) increased global awareness of the need for action. As climate change is one of the most pressing issues for our clients and investments, BCI joined 35 other institutional investors in advance of COP26 to sign the Canadian Investor Statement on Climate Change, making clear our expectations of the companies in which we invest and reinforcing our commitment to supporting the transition to a low-carbon economy.

Closer to home, British Columbians felt the impacts of extreme weather events as we experienced deadly wildfires, unprecedented heat, and flooding during the year. These events took lives, forever impacted communities, and resulted in major damage to infrastructure and the environment. The people of British Columbia showed their resilience as they worked together to rebuild and to collectively address and identify climate solutions.

We talk about resilience a lot at BCI. Our clients have long-term investment horizons and building a portfolio that performs through market cycles and periods of volatility is paramount to meeting their investment needs. Physical climate risk, regulatory risk, and decarbonizing the economy will impact the portfolio, and it is our job to understand and manage these implications, relying on a combination of in-house and market-leading tools and methodologies, so that we can deliver long-term returns.

Some estimate that trillions of dollars annually are needed over several decades to address climate change. Governments will contribute, but significant investment will come from the private sector and institutional investors, like BCI. We actively look across asset classes for opportunities benefiting from, or supporting, the energy transition, while always keeping our focus on meeting return expectations. We have made substantial progress:

  • Our total participation in sustainable bonds now surpasses $2.5 billion, with $1.7 billion completed in 2021, bringing us more than halfway towards the $5 billion investment expected by 2025.No alt text provided for this image

  • QuadReal, BCI’s real estate and mortgage company, has the third-largest real estate green bond program in Canada, raising nearly $1.2 billion since 2020. The program finances current and future projects with clear environmental benefits, and supports QuadReal’s commitment to reducing its operational carbon footprint.
  • In our infrastructure portfolio, in February 2022 we agreed to acquire a significant interest in Reden Solar, a leader in solar energy development with operations across Europe and Latin America.

We are also evolving our climate strategy to remain competitive and reflect the latest science. Later this year, we will release our updated Climate Action Plan, setting out our comprehensive strategy for managing climate change across asset classes.


Decarbonizing our economy is an immense challenge that requires multi-stakeholder collaboration. BCI partners locally and globally to support initiatives driving meaningful change and to advance our knowledge and influence on matters most material to our clients.

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In 2021, we announced a three-year climate finance research project with the University of Victoria and the Pacific Institute for Climate Solutions. Our partnership combines BCI’s climate scenario and valuation expertise with leading academic and applied research to build data and capacity in the field, and broadly share learnings with peers, academia, policymakers, and the public.

Supportive government policy is critical to accelerating the transition to a low-carbon economy and BCI actively engages with policymakers. We advocate for policies aligned with achieving the global goal of driving emissions to net zero by 2050 and support mandatory public company disclosure in line with the Task Force on Climate-related Financial Disclosures. In 2021, we were appointed to the federal government’s Sustainable Finance Action Council, where we are helping to shape sustainable finance markets in Canada. At a provincial level in British Columbia, we participated on the new ESG Advisory Council, consulting with the Minister of Finance on ESG-related issues for the 2022 budget.


As the private sector plays a large role in transitioning to a low-carbon economy, we increased our expectations for how companies report on and address climate change risk. Our proxy voting record in 2021 demonstrates these expectations: we supported 80 per cent of climate change shareholder proposals and voted against 51 directors at 34 companies for a lack of climate disclosure or poor performance — sharp increases in both metrics compared to the prior year. Where climate performance is not keeping pace, we engage with directors and leadership of publicly traded companies.

We also work with our privately held companies to adopt best practices in climate management and disclosure, and actively support their transition to low-carbon operations — including net-zero commitments like those made by Puget Sound Energy and Thames Water last year. At the end of the day, our portfolio companies must evolve and thrive so that they continue to generate value for our clients.


The pandemic has exacerbated inequities and occupational health and safety concerns. Research demonstrates the link between financial benefits and workplaces following best practices in these areas. In the past two years, we raised our expectations of companies on gender, ethnic, and racial diversity and actively engaged on the workforce impacts of the pandemic. We also supported the development of reporting frameworks and introduced key performance indicators to effectively measure broader progress.

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Addressing climate change and ESG issues is not only a source of potential investment opportunities, it also allows us to manage long-term financial risks.

At BCI, we are guided by our fiduciary duty to clients and our organizational purpose of helping hundreds of thousands of British Columbians secure a strong financial future. The people we are serving include our children's teachers, our health care providers, our municipal workers, and our neighbours.

An excellent message which shows you how seriously BCI takes its commitment to addressing climate change risks and opportunities as well as its commitment to diversity, equity and inclusion. 

One thing that you realize, BCI is evolving its climate strategy to remain competitive and reflect the latest science:

We are also evolving our climate strategy to remain competitive and reflect the latest science. Later this year, we will release our updated Climate Action Plan, setting out our comprehensive strategy for managing climate change across asset classes.

Climate strategy isn't static, you need to evolve it as the science evolves and as you learn and adapt from others.

Now, in terms of actions, I note what Ramy Rayes, Executive Vice President, Investment Strategy & Risk states about integration:

I also note the ESG risk and opportunity framework which works to bolster BCI's total portfolio approach and how the organization is evaluating ESG opportunities across all asset classes:

Interestingly, BCI’s strategies in fixed income will lead to an estimated cumulative participation of $5 billion in sustainable bonds by 2025. 

Daniel Garant, Executive Vice President & Global Head, Public Markets, states this:
The growth of the sustainable bond market and the strong demand for labelled bonds demonstrates that ESG-focused investments are becoming a long-term, mainstream trend.

BCI’s fixed income strategies allowed us to surpass 50 per cent of the $5 billion in investments we expect to reach by 2025. This acceleration supports our clients’ return objectives and provides positive outcomes through use of proceeds.

 In terms of external managers, there is a comprehensive evaluation framework to evaluate them 

And Jim Pittman, Executive Vice President & Global Head, Private Equity, states this: "Improved transparency, quality, and comparability of industry-level ESG information will strengthen our ability to measure and manage ESG factors when seeking opportunities and managing risk in our private equity portfolio."

I also think it is worth mentioning the great work BCI's real estate subsidiary, QuadReal, is doing on integrating ESG in its portfolio:

The same goes for Infrastructure and Natural Resources, the team is integrating ESG factors in every investment:

It is also worth noting BCI's approach to engagement with public companies, even with a giant like Amazon:

What else? Along with encouraging other companies to follow the TCFD’s recommendations, BCI is committed to incorporating them into its own reporting and disclosure practices: 

I am only providing you with a glimpse of how BCI integrates ESG in its portfolio and engaging with its clients on these initiatives:

Once again, a full detailed discussion on BCI's 2021 ESG report is beyond the scope of a blog comment. 

I highly recommend you take the time  to read BCI's 2021 Annual ESG report here and the supplementary case studies here (click on PDF icon on top to get the PDF file).

This report is so comprehensive, so detailed, providing a lot of great insights and I am really only scratching the surface above.

Lastly, I want to publicly recognize BCI's ESG Working Group and all those who worked so hard to contribute and produce such an in-depth report, they should be very proud as should all of BCI's employees who contributed to this detailed report:

I also want to congratulate BCI's CEO/CIO for being named one of BIV News' BC500 in Banking and Finance. BC500 features influential leaders who have made an impact on British Columbia's communities, industries and economy:

Well done and well deserved! As a reminder, I recently covered BCI's 2021 results and had a detailed discussion with Gordon covering the results and more. 

Below, BCI's CEO/ CIO Gordon Fyfe took part in a panel discussion on long-term strategic thinkers at the Milken Institute back in May. Take the time to watch this discussion and listen to Gordon's discussion on strategy (minute 11) and his views on many issues including why engagement works better than divestment.