While the pension industry has historically thought about the sustainability of pension plans themselves, it’s now time to think about sustainability more broadly, said Kate Nazar, vice-president of strategy and market development for group retirement services at Sun Life Financial, during a panel at Benefits Canada‘s 2020 DC Plan Summit in Montreal in February.
“We’re in 2020 and many Canadians are in crisis,” she said, citing record debt levels, changing work styles that mean little to no savings, the overwhelming evidence of the impact of climate change and an epidemic around mental-health illnesses in Canada.
As well, millennials, who comprise 50 per cent of the current workforce, are now a driving force. “Millennials and gen Zs are not only looking at corporate sustainability strategies from the lens of their buying decisions or brand loyalty, they’re also looking at it from a decision of, ‘Do I stay with that organization? Does it align with my values? Do I need to work somewhere else?’” she said, referring to research by Butin Integrated Communications.
Also, many Canadians are suffering from eco-anxiety, added Nazar, which left unchecked will impact performance and engagement because people won’t be motivated to join their workplace pension plans or save for the long term.
Suncor Energy Inc., Patricia O’Reilly, the company’s director of sustainability outreach and disclosure, and Nora Lamb, manager of pensions, also joined Nazar to discuss how sustainability is a growing part of the conversation for their organization.
Over the last decade, Suncor has been trying to embed sustainability into different parts of the business, said O’Reilly, noting the company was a founding member of an organization called the Embedding Project, which provides companies with a self-assessment tool to see where they’re strong and where they need to improve. “It will give you a maturity measure.”
To begin, Suncor embedded sustainability in strategic planning, capital decisions and project management decisions — and now it’s moving into HR processes as well.
For example, following the Fort McMurray, Alta. wildfires, employees reached out to see if they could access their savings or if there was another way to get financial help, said Lamb. “We’re looking at how [to] potentially make our savings plan, which is [non-registered], a little bit more flexible to meet immediate needs, potentially emergency needs.”
Suncor is also starting to embed ESG principles into its investment process, she said. “We’re just starting that journey.”
And the energy company is also beginning to talk to its pension committee about how to address sustainability on the investment side in both its defined contribution and defined benefit plans, as well as how it can change its governance and work with investment organizations and consultants, noted Lamb. “We’re really in the infancy.”
Read more stories from the 2020 DC Plan Summit.