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

Once ‘The Foreigner’ arrives, everything changes in Tilghman County, Georgia

Funny, but touching, too, this play will have you in stiches. Don’t miss it

Mary Lowther column: Control your own food supply: grow out some seeds

I used to buy garlic bulbs, but now I’ve grown some out long enough to flower and produce bulbils

Business notes: Sweet Meadows Market getting ready for May 4 grand opening in Mill Bay

Paul and Corinne Lieffertz have never been busier and they’re loving every… Continue reading

VIDEO: Killer whales hunt for seals in Vancouver harbour

Bigg’s killer whales feed on marine mammals like seals, sea lions, dolphins and even other whales

Cowichan Coffee Time: Awards, new digs and fundraising totals

• St. John Ambulance First Responder Divisional Superintendent Glyn Trafford got a… Continue reading

Amber alert issued for 5-year-old Ontario boy

Ethan Montes is believed to be in the company of his mother, 47-year-old Juliet Mohammed

Blaine, Wash. inn owner, charged with smuggling people into B.C., granted bail

Robert Joseph Boule ordered to turn away anyone indicating a plan to enter Canada illegally

RCMP arrest B.C. man following threatening Vaisakhi Facebook post

Post made reference to pressure cooker bomb at massive Surrey parade

Another illegal dump of 200 Dungeness crab discovered in northern B.C.

DFO confident new site related to larger April 2 dump

Northern B.C. high school student reaches 100,000 followers on YouTube

Voice actor, animator, Jericho Fortune has more than 30-million views on his channel GTAGAMER222

Most Read