ESG at OMERS
Environmental, Social and Governance (ESG) factors like the ones listed below may be relevant to the financial performance of the companies and assets in which we invest. This means integrating ESG factors into our investment approach is consistent with our objective to fulfill the pension promise.
The specific approaches used by OMERS Business Units may vary given the nature of the assets or investment strategies they pursue and the extent to which ESG factors may be relevant to investment performance.
OMERS recognizes that environmental factors may affect the operations, future prospects and value of investment assets, particularly in industries that use or are dependent on natural resources. We expect our investee companies to have a good understanding of the environmental risks and opportunities they face and to have appropriate strategies and practices in place to address them.
We believe that climate change is one of the most pressing issues of our time and that the transition to a lower carbon economy can have a significant long-term impact on the performance of the companies in which we invest. Climate change presents both physical and transition risks to the portfolio and generates opportunities as the global economy works to decarbonize in line with multilateral treaties such as the Paris Agreement. OMERS has set out its position on climate change in separate Climate Change Guidelines.
OMERS recognizes that our investee companies interact with various stakeholders including employees, local communities, governments, key suppliers, and customers, and that effectively managing this interaction over the long-term impacts profitability. We believe that companies that do not nurture, protect and enhance their “social license” to operate and positively contribute to society are less likely to perform well in the twenty-first century. OMERS expects investee companies to foster good government and community relations, support and respect the protection of internationally proclaimed human rights, including Indigenous rights, and make sure that they are not complicit in human rights abuses. OMERS encourages investee companies to pursue an inclusive and diverse workforce and promote the health, safety, and wellbeing of their employees and customers, and expects them to uphold international labour rights, including the freedom of association and the right to collective bargaining, the elimination of forced and child labour, and protection from discrimination in respect of employment and occupation.
OMERS recognizes the critical nature of strong governance structures and controls to the profitability of our investee companies. We actively promote good governance practices, including our endorsement of the Canadian Coalition for Good Governance (CCGG) Stewardship Principles.
In our public market asset classes, we exercise governance predominantly through our proxy voting program (in accordance with our Proxy Voting Guidelines), together with direct engagement strategies, both individually and collaboratively through organizations such as Climate Engagement Canada.
Within our private market asset classes, in many cases OMERS employs a “direct-drive” strategy whereby it is directly and actively involved in influencing the governance of the investee companies, both as a shareholder and through appointments to the boards of directors or other governing bodies of the investee company.