Responsible investing – at our core

Integrating environmental, social and governance (ESG) considerations into investment processes and stewardship practices.

As a pension fund, we need to take a long view of both risk and opportunity.

We know that environmental, social and governance (“ESG”) factors, such as climate change and diversity, will present material and evolving impacts over time. These factors are a necessary part of comprehensive risk management for a long-term investor.

Responsible investing – which means the integration of ESG considerations into our investment processes and stewardship practices – helps us not only ensure we can fulfill our pension promise to generations of members, but also helps influence the future and promote a just, sustainable society and economy.

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Yellow plane flying over forest

UPP’s responsible investing journey is at its very beginning, but core to our mission.

UPP is committed to embedding responsible investment practices throughout our investment activities. We believe this commitment reflects our fiduciary duty to secure sustainable pensions for the long-term.

Our strategy work in the coming months will be guided by our founding “Responsible Investing Beliefs” and supported by research and evidence. Part of that research is to explore our exposure to climate solution and carbon-intensive companies across our total portfolio, as well as the ESG capabilities and commitments of our investment managers. We want to invest in those who are driving solutions for climate change and transitioning their business models, and reduce our exposure to those who are not.

UPP’s initial responsible investing beliefs

ESG factors

ESG factors such as climate change and diversity will present material and evolving impacts over time and are part of comprehensive risk management for a long-term investor.

ESG lens

An ESG lens helps to better assess and create sustainable value, identify differentiated opportunities, and drive stronger long-term financial performance.

Engagement

Engagement is a key tool for investors to influence a culture of sustainability among investee companies and external managers and promote fair, efficient, and transparent market practices.

Responsibility

Investors have a responsibility to not only respond to evolving real-world challenges but also to promote a just, sustainable society and economy.

“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.”

Our responsible investing foundations

We are taking steps to lay the foundation for our strategy across four core elements. This foundation is our launchpad for our initial responsible investment approach.

One of our first and most critical foundations is our inaugural Responsible Investment Policy (‘RI Policy’), which encompass our initial commitments and approach and set an anchor for our future, evolving strategy.

This policy provides a framework for how we will consistently and comprehensively incorporate ESG considerations in our investment management and stewardship activities. Our first iteration reflects the practices of our founding institutions, peers, and the external standards that are practically implementable on Day One. In essence, it codifies and expands on the high-level ESG considerations and commitments summarized in our Statement of Investment Policies and Procedures (SIPP).

The policy will evolve in the coming months and years as UPP inherits more assets, gains a deeper understanding of portfolios, and welcomes new universities to the plan. This evolution will be driven by our steadfast commitment to the pension promise, with investing responsibly as a core tenet in our delivery of that commitment.

Our initial task is to understand and assess our current external managers and their responsible investing commitments and capabilities. We will review and evaluate their investment processes and the composition of the portfolios they manage for us in light of our evolving responsible investing practices and those around us. We will work with our existing managers to promote sound ESG practices and integrate responsible investment considerations into future appointments of new external managers.

We recognize the importance of stewardship, or “active ownership”, to align the interests of the companies we invest in, and the financial system more generally, with long-term value creation for plan members.

Proxy voting is an important component of our stewardship program that allow us to influence the appropriate oversight and management of environmental, social and governance (ESG) factors by publicly traded companies. Our Proxy Voting Policy outlines how UPP is likely to vote by providing an overview of our views and voting positions on a variety of topics, including our ESG expectations.

We plan to be an active part of the responsible investing community and join like-minded networks and initiatives to strengthen our approach to responsible investing and build strategic partnerships to help amplify our impacts.

UPP is joining (or seeking to join) the following networks and initiatives in the coming months. Current partnerships include:

We commit to communicating openly and transparently about our responsible investment practices as they evolve. At least annually, we will provide our plan members and the public with information on our approach to responsible investing, including our proxy voting and other stewardship activities, climate-related information informed by the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and diversity-related information.

Strong leadership

Our President & CEO, Barbara Zvan, was recently honoured as one of 26 Canadian Climate Champions by the British High Commission and the Canada Climate Law Initiative. 

“It’s time for sustainable finance to simply become ‘finance’. When climate consciousness becomes part of everyday savings and investment decisions, we make smarter choices, with better outcomes, and more significant impacts.”
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We always welcome feedback from our members and other stakeholders.

We are at the beginning of our journey and ongoing dialogue is part of our growth. We are committed to continuously improving our reporting to promote transparency and welcome comments from UPP members about our approach anytime, through our online feedback form or via [email protected].

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.