CPPIB will evaluate human rights when investing

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The Canada Pension Plan Investment Board (CPPIB) will now examine the human rights record of the companies it owns.

 

The CPPIB already had guidelines in place to use when evaluating climate change, water use, executive compensation, and the practices of companies in the oil & gas and mining sectors (also known as extractive industries). The board announced on August 26 that it has decided to replace the extractive industries focus area with human rights, on the grounds that strong human rights practices contribute to long-term value and ultimately to higher returns.

 

"Under the human rights focus area"

 

"This new human rights focus area will replace the extractive industries focus area, but it’s important to note that despite this change, engagements with the oil & gas and mining sector on a variety of ESG [environmental, social, and governance] matters will remain a key priority for CPPIB," explained the board in its statement. "They will now be captured under the human rights focus area, as well as the focus areas of climate change and water. At the same time, the new human rights focus area will also enable CPPIB to broaden our engagements in other sectors that we consider prone to human rights-related risks, such as consumer goods and information technology."

 

Engaged with the Democratic Republic of the Congo

 

Among other things, the CPPIB is a party to the United Nations-supported Principles for Responsible Investment, and it is engaged with the Democratic Republic of the Congo where it is encouraging that country’s electronics, automotive, and battery manufacturers to improve their cobalt supply chain management systems.

 

"CPPIB also expresses its views on a number of issues, including human rights, by way of proxy voting. We review every voting item put to shareholders at public companies in which we invest," reads the announcement. "Over the past five years, we have supported several dozen human rights-related shareholder proposals, many of which request additional disclosure from companies on human rights-related risk."

 

As published in The Insurance & Investment Journal by Andrew Rickard Aug. 29, 2016  11:28 a.m.

 

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