The Public Sector Pension Investment Board is updating its proxy voting guidelines to communicate its views on sound corporate governance practices and climate change.
According to the guidelines, boards of directors at the companies in which PSP Investments invests, are expected to ensure climate risks and opportunities are integrated into their strategy and operations. They also encourage companies to increase the credibility of their transition efforts through measures such as climate-related governance structure, accountability for oversight of climate commitments and a transition plan aligned with climate science.
On a case-by-case basis dependent on a company’s ownership position, PSP Investments will prioritize engagements to articulate its views on the global transition to net-zero emissions and to determine if management has the capacity and willingness to improve their climate-related management practices.
Where boards fail to demonstrate adequate consideration of physical and transition-related impacts from climate change and to develop and disclose effective management plans in response to these risks, PSP Investments will vote against directors for accountability purposes to preserve long-term sustainable value, according to a press release.
“Our climate strategy roadmap guides us to using our capital and influence to support the transition to net-zero global emissions by 2050,” said Herman Bril, managing director and head of sustainability and climate innovation at PSP Investments, in the release. “In updating our principles, we are executing on our strategy, using proxy voting to promote corporate practices that address climate change, support transition plans and contribute to the long-term performance of the companies in which we invest.”