The Canada Pension Plan Investment Board has added human rights as one of its focus areas for engaging with companies in which it invests.

“We believe that strong human rights practices contribute to long-term value and engaging with companies in our portfolio on this topic is therefore an important part of our strategy to maximize long-term returns,” said the pension fund in a news release.

CPPIB’s four focus areas had previously been climate change, water, executive compensation and the extractive industries (the oil and gas and mining sectors). The new human rights focus will replace the focus on the extractive industries, according to the pension fund, though it noted that despite the change, it will continue to engage with the oil and gas and mining sector on a variety of environmental, social and governance matters as a key priority.

Read: CPPIB sees 1.45% net return in first quarter

“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.”

The CPPIB has set out a series of ways in which it will engage with companies on human rights issues, including:

  • It is a member of a collaborative engagement led by the United Nations-supported principles for responsible investment, which is aimed at encouraging companies in the extractives sector to implement the UN’s guiding principles on business and human rights and improve disclosure of human rights-related policies and processes.
  • Its sustainable investing group is part of Hermes Equity Ownership Services’ global engagement platform, which supplements and expands the pension fund’s capability to engage with companies in which it invests globally.

CPPIB said it 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,” said the news release. “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.”

Read: CPPIB head of sustainable investing named to climate task force

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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