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As a long-term investor, we must take meaningful action to create sustainable value through evidence-based practices. That’s why sustainability is a comprehensive focus across UPP—in how we both invest and operate as an organization—and a fundamental lens through which we derive and protect value for members.
ESG approach
We know that ESG factors, such as climate change, will fundamentally influence the long-term sustainability of financial markets. With a systems-level view, we account for these factors at every stage of the investment process to better derive and protect value for members, in line with our fiduciary duty. This includes working with our external investment partners and industry peers to continuously improve performance in these areas and reinforce the health of the capital markets on which our fund relies.
Environmental, Social, Governance (ESG)
ESG refers to environmental, social, and governance factors that may impact or be impacted by corporate or investment activities.
Every investment professional is responsible for considering the economic impact of material ESG factors in their investment decision-making and for clearly communicating our related policies and expectations to our investment partners.
Our 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. All of this is informed by our long-term investment beliefs.
A systems-level focus
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. We see this systems-level focus as essential in meeting our fiduciary duty to our members and ensuring every decision we make contributes to the Plan’s long-term sustainability.
Climate Action Plan
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. UPP will transition our investment portfolio to:
Net-zero
GHG emissions by
2040
or sooner
With interim carbon footprint reduction targets from a 2021 baseline (tCO2-eq/$M invested):
16.5% by 2025
and
60% by 2030
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.
We see this commitment as central to delivering long-term value, and an essential beacon for our evolving investment strategy.
Stewardship
At UPP, we firmly believe in the power of stewardship as a lever for value creation, risk management, and improved corporate practices. Stewardship refers to investors using their influence with companies, policymakers, and other stakeholders to drive change in order to protect and enhance long-term value.
Engagement
We engage in outcome-focused dialogue with the companies in our portfolio and our external investment managers about systemic issues and material risks, such as climate change, human rights, and corporate governance.
Proxy voting
As a shareholder in publicly traded companies, UPP has the right to vote on items of importance at annual and special company meetings. We exercise our proxy voting rights to communicate expectations and hold publicly traded companies accountable on their ESG practices. Our Proxy Voting Policy clearly states our positions and expectations on an array of issues focused on enhancing the long-term economic interests of shareholders, including our ESG expectations.
Advocacy
We participate in direct and collective advocacy with policymakers, regulators, and within the financial sector to encourage fair and efficient public policy, regulations, and market systems that support a well-managed transition to a net-zero world and UPP’s broader sustainability objectives. Examples:
Collaboration
We selectively collaborate with investors and organizations at the national and global level to enhance the impact of our engagement and advocacy, including our efforts to influence industry practices and norms, and promote market-wide sustainable standards and practices.
Partnerships also enhance our access to global tools, research, networks, training, and other resources from peer investors, which help advance best practices within our own operations, with the costs shared across the collective.
Investment exclusions
In general, as a first course of action to influence investee behaviours and effect change, we favour active engagement and constructive dialogue over excluding or selling investments. However, our principles-based investment exclusion policy and sector 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
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Statements and submissions
We participate in direct and collective advocacy and engagement with policymakers, regulators, and within the financial sector.
Responsible investing policies
We are committed to communicating openly and transparently about our investment practices.
Climate Action Plan
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.
- © 2024 University Pension Plan