Responsible Investing

 

As a fiduciary, TRAF is held to high standards of investment behaviour, and all investments made on behalf of the fund must be consistent with the objectives of the plan as set out in the Statement of Investment Policies & Procedures (SIP&P). The SIP&P is reviewed and approved annually by our Board.

While TRAF has no express mandate to exclude certain investments based on any single factor, many factors, both financial and non-financial, are considered when evaluating opportunities to earn the long-term returns that are needed to ensure the plan’s sustainability. 

In this regard, TRAF believes entities that are mindful of, and responsive to, environmental, social and governance matters (commonly known as "ESG" factors) will generally perform better over the long term. As TRAF does not invest directly, we encourage third-party investment managers engaged by the fund to incorporate an assessment of ESG factors into their investment decisions made on our behalf.

Furthermore, through our active membership in various organizations focused on ESG matters, such as the Canadian Coalition for Good Governance (CCGG) and the Pension Investment Association of Canada (PIAC), we seek to further promote the acceptance and implementation of ESG principles across the global investment industry. It is TRAF’s belief that, through these efforts, we can use our position as a global investor to advance the more comprehensive consideration of the risk of climate change in investment decisions.

It is noted that TRAF has no express mandate to exclude investments based solely on social, moral or political issues. While the exclusion of investments for such reasons may be theoretically permitted under certain circumstances, the implementation of such a program by an institutional investor like TRAF, which represents thousands of beneficiaries with a wide range of personal beliefs, can be extremely difficult, if not impossible. As a result, the Board has not adopted any such policies.

Rather than excluding certain investments, TRAF has decided that we can best fulfill our fiduciary duty by encouraging our investment managers, and the investment industry as a whole, to consider ESG factors in the investment decision-making process. In doing so, we endeavour to ensure our investments earn the return necessary to pay members’ pensions today and in the future.