Canadian investors falling to meet climate targets

I4PC review shows major investors often skip backing climate proposals, despite pledges

Canadian investors falling to meet climate targets

A review by the Canadian climate group Investors for Paris Compliance (I4PC) has raised questions about the commitment of Canadian institutional investors to climate change initiatives, The Globe and Mail reports. 

Despite numerous pension and money managers signing pledges or joining groups to promote emissions reduction, their support for shareholder climate-change proposals during annual corporate elections appears lackluster. 

The I4PC's examination of 35 public pension plans and private-sector asset managers revealed a mixed response to climate proposals. Fifteen of these investors supported fewer than half of the climate proposals presented to them in 2023, while 14 of the remaining 20 backed at least 75 percent of such initiatives.  

This analysis was based on voting records for 26 shareholder resolutions across 21 companies, focusing on the disclosure of climate risks and the adoption of climate-change policies. 

Kyra Bell-Pasht, I4PC’s director of research and policy, emphasized the importance of voting in alignment with climate priorities, stating, “At no point do we say you have to vote for every single one, but if you’re voting against most of them, it indicates climate change is not a priority for you.” 

The review highlighted a few institutional investors who consistently supported climate-related proposals, including the Canada Post Pension Plan, Gestion FÉRIQUE, Bâtirente, Genus Capital Management Inc., and Vancity Investment Management. Conversely, private-sector money managers like Beutel, Goodman & Co. Ltd. showed reluctance, with Beutel Goodman voting against all seven proposals it faced. 

RBC Global Asset Management and Scotia Global Asset Management, among others aligned with Canada's largest banks, demonstrated a general trend of voting in favor of fewer than half the climate proposals considered.  

These institutions often cited proposals as too prescriptive or redundant due to existing company practices as reasons for opposition. 

Melanie Adams of RBC Global Asset Management and Sue McNamara of Beutel Goodman highlighted their firms' case-by-case approach to shareholder proposals and direct engagement with company management on climate issues, respectively.  

They argued that proxy voting represents only one aspect of their commitment to climate initiatives. 

The report also noted that public pensions in Canada generally showed stronger support for climate proposals, with several prominent plans voting in favor of the majority of the initiatives they considered.  

The Ontario Municipal Employees Retirement System, Public Sector Pension Investment Board, and Ontario Teachers’ Pension Plan offered more nuanced support, aligning their voting practices with guidelines that avoid imposing arbitrary constraints on companies.