A conversation with CEO, Barbara Zvan, on sustainable finance and COP26

Why is working at UPP meaningful to you, and what excites you most for the future?   

BZ: I’ve always been a huge advocate for the defined benefit (DB) pension model, which gives beneficiaries a specified, predictable amount on retirement. That income certainty helps enhance pension and retirement security and provides an efficient way to save money through professional management and collective risk-sharing. There’s a clear purpose to that. I think for many people in this industry, the draw is the ability to have an individual impact on such an important solution for many people in their retirement.

Looking ahead for UPP, there’s so much excitement…almost everything about it excites me! Moving UPP from its inception to a maturing organization; it’s such a unique opportunity and one I consider myself fortunate to be part of, let alone lead. We never lose sight of the vision, tenacity, and decade-long commitment of so many to get us here. The passion surrounding the creation of this plan was palpable from day one. Now, I see that same passion in our team, who has embraced our purpose and understands how important the journey ahead of us is. Together, we’re devoted to bringing this plan to its potential and making our members, predecessors, and founders proud. I am confident we will do that and feel energized to work with our team every day.

How do responsible investing and pension security align?

BZ: The two fully and necessarily align. Responsible investing is a core part of the investment process, and we do it to add value for our members and contribute to a thriving future.  Over the last decade, we’ve seen increasing evidence that environmental, social, and governance factors are essential for investors to consider – especially long-term investors. As a pension fund, we might be part of a member’s journey from the time they join in their 20s to when we deliver their pension cheque at 60-70 years old. ESG and climate change are critical factors impacting the value of their pension over those 50 years, which is why it’s an essential consideration.

Where did your passion for responsible investing (RI) and sustainable finance originate?

BZ: Honestly, it stems from my drive to make things better where I can. My family and those close to me will attest that it’s a passion of mine. In the case of RI, around 15 years ago, I had the benefit of spending a lot of time with international peers and pension plans globally. They were voicing different concerns around ESG and climate change than in North America. You started thinking, are we missing something compared to, say, our European or UK peers? When you started understanding more about their concerns, the importance began to crystalize – not just for investment portfolios but the real world and real economy impacts. It resonated with me, and I asked myself, “where should I be spending my time?”. As part of a large pension plan, I saw an opportunity to make a difference.

I then had the privilege of serving on Canada’s Expert Panel on Sustainable Finance, which broadened my horizon and fueled my passion even more. Over hundreds of discussions, I saw the individual dedication and efforts being put forth across Canada and how the right building blocks could accelerate and scale those efforts into a mainstream movement. One of those building blocks was the Sustainable Finance Action Council, one of the Expert Panel’s core recommendations. The Council is all about bringing a practical market perspective to policy and creating a collaboration platform for public and private leadership on necessary sustainable finance foundations. I’m pleased to do my part there and for UPP to contribute to this incredibly important work.

What role do Canada’s institutional investors play in achieving a climate-resilient, net-zero future? 

BZ: Institutional investors play a crucial role in influencing necessary change and financing Canada’s transition to a climate-resilient, net-zero future. Tackling issues like climate change will require significant effort and investment. By investing responsibly and collaborating with investee companies to transform business practices, we can help encourage an inclusive transition. What does that look like? First, it’s investors continually asking themselves whether their actions align with the transition to a net-zero, climate-smart future. Second, through stewardship activities like engagement, institutional investors can share their concerns on climate, governance and other ESG factors directly with a company’s leadership team or board. Hopefully, the company responds to those concerns with incremental change and by continuing the dialogue over time. Third, investors can pool resources and amplify their influence through collaborative engagements. An investor may only own a small share of a company, but their voice grows in line with their collective ownership stake by combining forces with other investors. Now, these investors can bring a strong, unified voice in identifying material risks or opportunities and motivating change.

It’s why, in these early days of UPP’s build, one of our first priorities was aligning ourselves with other investors via collaborative engagement initiatives like Climate Action 100+ and the newly-launched Climate Engagement Canada.

What do you hope to take away from COP26?  

BZ: At the highest level, I’m hoping that countries are ambitious enough on their Nationally Determined Contributions, with robust targets for reducing emissions. Hopefully, we’ll reach a critical mass for net-zero by 2050. It may seem like a long time away, but we have a lot of change to implement in our industries, our power systems, and how we transport ourselves and materials. For Canada, there is undoubtedly an environmental imperative to be net-zero. But it’s also vital to our economy – the things we produce, the jobs we create, and the prosperity we secure.

I also hope there will be a commitment by developed nations to help developing nations. Developed nations created most of the emissions that caused climate change, but developing nations face the most significant impacts. Lastly, I would love to see increased collaboration amongst all the different players, from governments, investors and industry to everyday citizens.