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Leading with sustainability
Responsible investing is a crucial and integral part of every investment – from deal sourcing, due diligence, and execution to monitoring and asset management. By integrating environmental, social and governance (“ESG”) considerations throughout the investment process, we remain ahead of the risk and opportunity curve, positioning UPP for strong, sustainable long-term performance.
Introducing UPP's Climate Action Plan
Part of being a responsible investor is advancing emissions reduction and climate resilience across our portfolio and in the real world. We commit to transitioning our investment portfolio to:
Net-zero
GHG emissions by
2040
or sooner
with interim emissions reduction targets:
16.5% by 2025
and
60% by 2030
This means our investment portfolio will emit minimal
greenhouse gases, and 100% of the remaining emissions will be offset by 2040.
We see this commitment as central to delivering long-term value, and an essential beacon for our evolving investment strategy.
Our Climate Action Plan outlines the steps and tools we will take to achieve our net-zero target and manage climate-related investment risks and opportunities, while helping drive the broader global transition to a resilient net-zero world.
The Action Plan speaks to two deeply connected objectives for UPP – growing a strong, resilient fund that secures retirement benefits for our members today and far into the future – and investing in a stable, healthy world for our members to retire into.
Promoting the health of financial, social, and environmental systems
Investment belief #2
As a long-term investor, UPP has a responsibility to promote the health of the capital markets and the financial, social, and environmental systems on which capital markets rely.
Impact is a core value at UPP, which we define as fostering a financially, socially, and environmentally resilient future for members in all we do.
This value is embedded in our core investment beliefs and approach, ensuring that every decision we make contributes to the Plan’s sustainability and the health of the capital markets on which our fund relies.
Creating Value and Managing Risk
End-to-end esg integration
Investment belief #4
All aspects of investing should be forward-looking and intentional. Successful investing requires rigorous research and analysis, alignment with UPP’s capabilities and focused innovation.
Our ESG focus extends to the highest level at UPP and is embedded throughout the organization.
Every investment professional is responsible for integrating ESG considerations into their investment decisions and communicating UPP’s policies and expectations to external investment managers. We believe this commitment reflects our fiduciary duty to secure sustainable pensions for the long-term.
Reporting directly to the CEO, our Responsible Investing team sets ESG strategy and targets, identifies emerging focus areas and activities, and develops processes and tools to ensure ESG risks, opportunities and impacts are understood and managed from the total portfolio level down to our individual investment mandates.
A hard line on sustainability
In general, we favour active engagement and constructive dialogue over excluding or selling investments as a first course of action to influence investee behaviours and effect change.
Our principles-based investment exclusion policy and set of general parameters set out the companies we will not invest in if:
- We do not believe they contribute to the Plan’s sustainability and the health of the financial, environmental, and social systems on which the capital markets rely, and
- Where engagement and other activity has not, or is unlikely to, effect meaningful change.
Exercising our influence through stewardship
Investment belief #3
Creating value and managing risk involve exercising UPP’s voice to influence outcomes related to material issues through active ownership, policy advocacy, and collaboration with other investors and stakeholders — all of which must be approached with the same intention and rigour as selecting investments.
By investing in companies and establishing relationships with external managers, we gain a seat on the table that we can use to promote fair, efficient, and sustainable financial markets.
Active Engagement – We engage in proactive dialogue with the companies we invest in and our external investment managers to make our expectations clear on ESG issues such as climate change, reconciliation, and human rights.
For example, through collaborative initiatives such as Climate Action 100+ and Climate Engagement Canada, we’ve joined with leading financial institutions to engage top-emitting companies on the need for stronger climate risk governance, disclosure, and a swift transition to a net-zero world.
Proxy Voting – Proxy voting is a key component of our stewardship program, allowing UPP to influence the oversight and management of ESG factors by publicly traded companies. Our proxy voting policy summarizes our expectations on ESG factors such as diversity on board and climate disclosures, so that Boards of Directors and company management teams know our positions on their policies and practices.
Advocacy – We selectively communicate with regulators and policymakers – either independently or with likeminded peers – to encourage public policy, government regulations and market systems that support a well-managed transition to a net-zero world and the Plan’s broader sustainability objectives.
Partnering for impact
We are fortunate to house experts and contributors to the global responsible investing community, with deep experience building comprehensive ESG programs. UPP participates in and contributes to collaborative initiatives within this community, to:
- Leverage the power of scale to amplify our impact
- Enhance access to global tools, data, and best practices
- Help deliver a strong, unified voice to companies about material matters
ESG oversight
Our suite of investment policies provide a framework for how we will consistently and comprehensively incorporate ESG considerations in our investment management and stewardship activities.
These policies will continually evolve as we grow and advance our investment program, driven by our steadfast commitment to the pension promise.
UPP’s Managing Director of Responsible Investing regularly reports on ESG strategies and developments to UPP’s Management Investment Committee, Board Investment Committee, and overall Board. As we progress in our investment approach and Climate Action Plan, formal governance and oversight will include set performance objectives, further public commitments and targets, and transparent reporting on progress in line with the Net-Zero Asset Owner Alliance requirements and the recommendations of the Task Force on Climate-Related Financial Disclosures.
We know that companies are more sustainably profitable, and more stable, when they prepare for and act on the issues transforming our world. We will not only invest in those organizations; we will be one of those organizations. That work begins by understanding the ESG profile of our consolidated portfolio and investment managers today, and how we can best achieve positive change.
Learn more about our approach
UPP’s governing investment policies are meant to provide transparency in our investment approach and principled, consistent application of our total fund investment strategy.
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