The Prince of Wales’ Accounting for Sustainability project has launched a Canadian chapter of its chief financial officer network that will focus on the role the finance community plays in integrating environmental and social issues into financial decision-making.
Founding members of the Canadian chapter, which is the first outside Europe, include chief financial officers from a number of large pension funds and insurance companies, such as the British Columbia Investment Management Corp., the Ontario Municipal Employees Retirement System, Brookfield Asset Management Inc., the Co-operators Group Ltd., Manulife and the Workplace Safety and Insurance Board.
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“The idea was that CFOs could really provide a leadership role in looking at how their organizations behave and making sure they behave in ways that are much more sustainable, thinking on a much more long-term basis,” says Pamela Steer, the WSIB’s chief financial officer and a member of the project’s global advisory council. “And why that’s particularly relevant to pension plans and other benefit providers is, of course, we have very long-tailed liabilities and very long-term investment horizons, so it dovetails very nicely with us.”
The Canadian chapter of the chief financial officer network will run in partnership with the Chartered Professional Accountants of Canada with the support of the Prince’s Charities Canada. It will publish online reports, guidelines and concrete tools that chief financial officers can use to make their organizations more sustainable for the long term, adds Steer.
“I was appointed to the global advisory council to start getting Canadian representation, so it’s been great to be able to provide some thought leadership and share ideas and talk about the difference between Europe and how Europe is reacting and working in the world of sustainability . . . and how that may change in North America,” she says.
In the case of the WSIB’s own financial sustainability, the organization was in “a world of hurt” following the Ontario auditor general’s 2009 report that found that if the WSIB and the provincial government didn’t sort things out, he was going to put the accumulated deficit onto the government’s books, says Steer. In response, the government introduced a regulation that said the WSIB must be 100 per cent funded by 2027 and then set interim goals so it could reach its target.
Steer joined the organization in 2012, just in time for its 2011 results, “which were the nadir for us financially, with the unfunded liability at $14.2 billion,” says Steer. “The WSIB has invested more upfront in rehabilitating and working with our injured workers. We have maintained our premium rates over that time and the employers of Ontario have been very understanding. They want us to get into a position of fiscal responsibility and financial sustainability.”
Over the past five years, the WSIB has reduced its deficit to about $4 billion and is six or seven years ahead of the government’s requirements, according to Steer. “That’s a big improvement and a big path towards long-term sustainability. We owe our injured workers benefits and compensation for the injuries they sustain in their place of work and, for some of these cases — unfortunately the worst ones, catastrophic injuries — we may be paying benefits out for decades . . .. So it’s very important we are looking at things for the long term,” she says.
“In a world of climate change, in a world of changing economies, population growth, demographics and so forth, we’re investing responsibly for the long term,” she adds.
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