Michel Leduc of the CPP investment board. (submitted)

Guest column: Do you believe the Canada Pension Plan will be there for you when you retire?

We know Canadians are counting on us.

By Michel Leduc

At the Canada Pension Plan Investment Board (CPPIB), we invest the money not currently needed to pay CPP beneficiaries, so we are asked this question a lot. We’ve polled Canadians and found that year after year, most don’t know or don’t believe CPP will be there for them.

This uncertainty has historical roots. In the mid-1990s, Canada’s finance ministers were warned by the country’s Chief Actuary that the CPP fund would run out of money within two decades barring changes.

This was a challenge of immense proportions. One of the actions that ministers took to overcome that crisis was the creation of CPPIB, an independent professional investment manager with a clear and focused job: to invest CPP money in capital markets to achieve growth sufficient to give Canadians the benefits they were promised. Until then, fixed income assets backing pension obligations were not enough. Put simply, the only way to earn higher returns is to expose the fund to greater risk. Our sole investment focus has made a significant contribution to help ensure the sustainability of Canada’s pension program. So far so good. Yet, even as the fund is much more stable today, the work is never done, and our focus relentless.

Environmental, social and governance (ESG) issues loom heavily on how we carry out our work whether it is a specific investment or managing the total portfolio of diverse assets. We believe that organizations that address these issues effectively are more likely to endure and create value over the long term.

CPPIB has its own in-house Sustainable Investing group that helps factor ESG considerations into investment decisions. They also engage with the companies we are invested in, encouraging businesses to manage these issues better.

If you search “CPPIB” and “Sustainable Investing” online, you’ll learn about the range of this work. It includes specific initiatives like addressing human rights in the cobalt industry and promoting more diverse boards. Many would argue these are simply the right things to do. We believe they are also expectations that deliver better returns over time.

You’ll also see our approach to climate change. We are working to be a leader in understanding the investment risks and opportunities of this global challenge. This work includes understanding the shift to lower-carbon energy markets. In the past two years, we’ve announced plans to invest more than $3 billion in renewable energy and became the world’s first pension fund to issue a green bond.

As our ESG work evolved, the clarity of our objectives ensured we never lost sight of our responsibility to help keep CPP sustainable.

We will never be done, which is why CPPIB was set up to be an enduring institution with a view to a very long investment horizon. We know Canadians are counting on us.

Michel Leduc is the senior managing director, Global Head of Public Affairs & Communications, Canada Pension Plan Investment Board.

Just Posted

Transport truck flips on its side on TCH in Duncan

Workers salvaged milk and ice cream

Somebody ‘saw’ something: North Cowichan/Duncan RCMP seek tool owner

The item was recovered from the area of York Road and Dingwall Street in Duncan.

Catch The Real Sarahs as they help open The 39 Days of July

Rising stars in the Americana music scene, The Real Sarahs are making… Continue reading

Drivesmart column: Should I signal?

My stock answer would be along the lines of “Will it hurt?”

Video shows fireworks shot at swan in Alberta

Alberta Fish and Wildlife is investigating the incident in Grande Prairie

WITH VIDEO: Two endangered marmots released on Vancouver Island

With three new pups born in May, two more Vancouver Island Marmots… Continue reading

‘Text neck’ causing bone spurs to grow from millennials’ skulls, researchers say

Technology use from early childhood causing abnormal bone growths in 41 per cent of young adults

B.C. teen killed by fallen tree on field trip remembered as hero

13-year-old Tai Caverhill was the first to spot the tree falling and warned his friends

Surrey RCMP raises Pride flag amid din of protesters

There were about 30 protesters on either side, and 20 Mounties doing crowd control

Should B.C. get rid of Daylight Saving Time?

The province wants to know, as state governments down south make the move

Air Canada reviewing how crew left sleeping passenger on parked plane

In a Facebook post, the woman said she woke up ‘all alone’ on a ‘cold dark’ aircraft

Canadians crash out of Women’s World Cup in 0-1 loss to Sweden

Canada missed a chance to tie the game on a penalty shot

Four-year-old boy assaulted at B.C. soccer game

It happened at a weekend tournament in Ashcroft

Most Read