Environmental, social and governance issues are key to the board’s investment approach.
Environmental, social and governance matters
Companies with strong environmental, social and governance (ESG) practices are better positioned to generate long-term value for investors than similar companies with less favourable practices. For this reason, BCI, as the board’s investment agent, integrates ESG considerations into its investment analysis, decisions, and processes. This helps ensure the plan fulfills its legal obligation to act in the best financial interest of all plan beneficiaries.
What are some of the key ESG factors?
- Environmental factors include systemic risks such as climate change, as well as how individual companies affect air and water pollution, carbon emissions, deforestation and energy efficiency
- Social factors include equity, human rights, labour standards, and workplace health and safety
- Governance factors can mean board compensation and structure, diversity, and transparency and disclosure
Influencing positive change
BCI is an active owner on behalf of the plan. It engages with companies to raise awareness that good corporate governance is the overarching framework for effectively managing risks. BCI also uses its influence as a shareholder to encourage companies to manage and report on ESG risks. Divestment eliminates any ongoing opportunity, as a shareholder, to positively impact company behavior.