The principal investment goal: maximize long-term, risk-adjusted returns
The CAAT Pension Plan takes very seriously its fiduciary responsibility to the Plan members who depend on us for secure, lifetime pension benefits. The principal investment goal of the Plan is to maximize long-term, risk-adjusted returns to secure pensions.
In carrying out the Plan’s investment decisions, we are guided by the three core principles of our Responsible Investing Policy:
Ultimately, CAAT believes that companies that have sound corporate governance structures and practices will outperform those that do not, and that managing the risk to long-term shareholder return includes the awareness and management of the environmental and social impacts of a corporation’s business activities.
The CAAT Plan’s Responsible Investing Policy states that the Plan will vote the proxies
attached to its shareholdings thoughtfully and responsibly, and that
shareholder proposals dealing with ESG factors will be examined considering the
effects of the proposals on shareholder value.
Votes are generally cast in favour of proposals that corporations adopt policies that
embrace the International Labour Organization’s Conventions, the Ceres
Principles on the Environment, and the Organisation for Economic Co-operation
and Development Guidelines for Multinational Enterprises.
The Plan joins with other institutional investors to encourage Canadian regulators and the management of Canadian public corporations to strive for better governance practices and more comprehensive disclosure of ESG risks. The Plan actively encourages corporations to improve disclosure on ESG factors and risks so that investors are better able to take such factors into account when looking at the risk and return prospects of investments in their portfolios.
The Plan has been a member of the Canadian Coalition for Good Governance (CCGG) since 2005. The CCGG was formed to represent the interests of institutional investors in promoting good governance practices in Canadian public companies, and to improve the regulatory environment to best align the interests of boards and management with those of their shareholders. The members of the CCGG include a range of institutional investors, such as pension plans, mutual funds, and other third-party money managers that manage approximately $4 trillion in assets.
Julie Cays, CAAT’s Chief Investment Officer, is a past Chair and current Vice-Chair of the CCGG Board of Directors, and Chair of its Governance Committee. She regularly participates in engagement meetings with directors of Canadian public corporations.
The CAAT Plan is a signatory to the United Nations-supported Principles for Responsible Investment (PRI), together with more than 2,200 institutional investors from more than 50 countries. The signatories to the PRI believe that an economically efficient, sustainable global financial system will reward long-term, responsible investment and benefit the environment and society.
The CAAT Plan is a signatory to the CDP (formerly known as the Carbon Disclosure Project). The CDP acts on behalf of hundreds of institutional investors in encouraging companies around the world to disclose information on greenhouse gas emissions, water usage, and their strategies for managing climate change and deforestation risks.
The CAAT Plan is an affiliate of SHARE – the Shareholder Association for Research & Education. SHARE is a Canadian organization that works with institutional investors to promote responsible investment practices through active ownership, research, and education. In 2019, SHARE became one of the Plan’s participating employers.
Members of the CAAT Plan’s investment team are active in the Pension Investment Association of Canada (PIAC), an organization focused on promoting sound investment practices and good governance for the benefit of pension plan sponsors and beneficiaries. CAAT’s Chief Investment Officer Julie Cays and Kevin Fahey, Managing Director, Investments, are both past Chairs of the PIAC Board of Directors.
The Institutional Limited Partners Association (ILPA) is a global industry association composed of limited partner investors in private equity funds. CAAT is an active member of ILPA and has endorsed the association’s Private Equity Principles, which promote the alignment of interest, good governance, and transparency that form the basis of effective relationships between limited and general partners.
As a long-term investor, the Plan encourages its investment and fund managers to integrate the consideration of ESG factors into investment decisions. This is done through the due diligence process for existing and potential managers as well as through an annual questionnaire that is sent out to the investment managers and general partners asking a series of questions about how sustainability factors are integrated into their investment processes. The Plan has tracked these responses for more than a decade and has found that investment and fund managers are increasingly considering the impact of ESG factors when making investment decisions.