The Alberta Management Investment Co. is focusing on all three legs of the environmental, social and governance stool this year and beyond.
The government-owned pension investment manager is addressing a range of ESG issues, from integrating climate risk to building a more diverse workforce to advancing its risk governance in 2021, according to its 11th annual responsible investment report.
On the environment front, almost a quarter (24 per cent) of its direct infrastructure assets under management are committed to net zero by 2050. And while climate change is front of mind, the AIMCo’s chief executive officer noted its roots in an energy-rich province.
“Alberta is the energy hub of Canada and a centre of generation, production, research, know-how and technology,” said Evan Siddall (pictured), the AIMCo’s new CEO as of July, in the report. “Our province can offer leadership that promotes economic development and positions both energy producers and consumers to succeed in a low-carbon economy. At AIMCo, we intend to invest additional resources in support of a climate strategy that spans asset classes.”
When it comes to social factors, the AIMCo has developed a comprehensive diversity, equity and inclusion action strategy and plan, as well as issued a formal DEI statement of commitment this year.
“The global pandemic served as a wake-up call on the materiality of systemic risks such as climate change, human capital management and diversity, equity and inclusion,” said Alison Schneider, vice-president of responsible investment at the AIMCo since late last year, in the report. “We are working on being more efficient and proactive in our processes, adding DEI and climate disclosure to every engagement and in developing ESG analytics such as a scorecard for private equity to more effectively capture ESG performance trends.”
The investment organization has also been focusing on governance issues this year, pointing to the example of Tanger Factory Outlet Centers Inc. in its report. Tanger had received low support for its advisory vote on executive compensation, including qualified support from the AIMCo “due to concerns regarding a disconnect between pay and performance.” The AIMCo’s engagement with Tanger focused on executive compensation, including changes the company made to its 2021 program, based on shareholder feedback.
“Governance is the final leg of the ESG stool and long a priority among institutional investors,” said Siddall. “In 2021, we substantially advanced our risk governance. Looking ahead, we will promote efficiencies in streamlining our decision-making processes and we will require strong governance among our investee funds and companies.”