Twelve of the 25 top global asset owners were pension funds as of year-end 2018, according a new report by Willis Towers Watson’s Thinking Ahead Institute.
The report found, among the top 100 asset owners, pension funds held 59.1 per cent of the fund assets, down 1.7 per cent from 2017, primarily due to assets amassed by sovereign wealth funds.
The Canada Pension Plan Investment Board ranked 18th globally in terms of size for all asset owners, while four other Canadian pension funds were among the top 100 — the Ontario Teachers’ Pension Plan (35), the Alberta Investment Management Corp. (67), the Public Service Pension Plan (69) and the Ontario Municipal Employees Retirement System (82).
Looking specifically at the pension funds on the list, the CPPIB ranked eighth globally, the only Canadian plan in the top 10.
Among these assets owners, sustainability is, and will continue to be, a major theme, the report said.
“During 2018 there were a number of sustainability initiatives by universal owner funds that involved ‘doing good while doing well’,” said Roger Urwin, global head of content at the Thinking Ahead Institute, in a press release. “This marks the start of a movement in which funds support societally beneficial initiatives that are consistent with financially sound fiduciary principles. GPIF, the Japanese fund that is the largest asset owner in the world, is at the centre of a number of these initiatives.”
Indeed, these investors’ future returns will partly hinge on how well they integrate environmental, social and governance considerations into their investment processes, said Marisa Hall, the institute’s director. “Global best practice on sustainability for asset owners is on an upward trajectory, but it still has a long way to go.”