As early as the 1990s, Desjardins Group put forward an innovative approach by marketing one of the first green funds in the country. Since then, integrating environmental, social and governance (ESG) factors into investment decisions has become standard practice for many of the most sophisticated institutional investors on the planet. This responsible investment (RI) approach is in harmony with the mission, vision and values of our cooperative, which aim to contribute to the economic and social well-being of people and communities.
As key stakeholders, Desjardins Group employees actively participate in this mission. Likewise, the Desjardins Group Pension Plan (DGPP), within the compatible limits of its field of action and its fiduciary responsibility, supports Desjardins Group’s commitments in terms of RI and sustainable finance.
As a long-term investor, the DGPP believes that effective management of ESG risks and opportunities can favourably influence the financial performance of its investments while having a concrete and positive socio-economic effect on communities.
Responsible investment policy
The DGPP has adopted a responsible investment policy that provides a clear, flexible framework to help incorporate ESG criteria into its asset management, taking into account the markets in which it invests. The policy oversees the implementation of responsible investment in DGPP activities and define monitoring mechanisms and reporting related to DGPP's responsible investment activities.
For more information, see the DGPP's Responsible Investment Policy: (PDF, 7.36 Mo).
The DGPP'S approach
In order to successfully embody its ambitions and sustainability values, the DGPP puts forward a three-part approach.
Integration of ESG factors
The DGPP considers ESG risks and opportunities throughout its investment process: from developing the asset allocation strategy to the selection and monitoring of its portfolio managers and investments.
In particular, the DGPP assesses the ability of portfolio managers to focus on the factors most likely to have a material impact on the results of the companies they analyze, including through reference frameworks from organizations such as the Sustainability Accounting Standards Board (SASB) or the International Sustainability Standards Board (ISSB).
The DGPP also ensures that it has a long-term view of systematic ESG risks that can influence its financial returns. The DGPP seeks to refine its understanding and integration of investment strategies in order to increase the positive impact of its investments.
The DGPP may exclude the securities of certain companies. These exclusions apply when a company's products are restricted under Canadian law or by international treaties. Similarly, the DGPP may exclude certain securities based on ESG factors when it deems necessary, consistent with the ESG positions adopted by Desjardins Group.
Currently, the DGPP excludes from its investment scope tobacco companies, companies linked to the thermal coal sector and companies associated with the manufacture of unconventional weapons or weapons of mass destruction.
RI influence strategy
In accordance with the best practices listed among long-term asset holders, the DGPP deploys an influence strategy to stimulate the emergence of conditions favourable to sustainability in the financial markets.
As a shareholder, the DGPP has adopted a proxy voting rights policy that includes positions on corporate governance and certain social and environmental issues. In order to ensure consistent execution of its portfolio, the DGPP, where possible, repatriates and exercises its voting rights.
For more information, see the DGPP Policy on the exercise of proxy voting rights (PDF, 3,73 MB).
Between July 1st 2023 and June 30th 2024, the DGPP exercised its voting rights associated with securities held through external asset management mandates at over 2,000 shareholder meetings. View a summary of the votes (PDF, 2,73 MB) cast for the companies in our portfolio. The DGPP works with its partners and portfolio managers to incorporate ESG factors into its investment management. The DGPP believes that it is appropriate for a portfolio manager to maintain open and constructive dialogue with the companies in its portfolio about ESG factors relevant to its business model and to promote best practices specific to each industry, asset class or portfolio strategy. The DGPP would like these engagement practices to include an escalation process when engagement results are deemed unsatisfactory.
In order to carry out its mission, the DGPP works with a large number of portfolio managers, which allow access to a very diversified repertoire of investment strategies, geographies and asset classes.
Consistent with the objectives of the Policy, the DGPP expects its managers to demonstrate leadership and competency in RI by:
By sharing its RI expectations, the DGPP wishes to provide a clear perspective on how it will evaluate the RI performance of its managers and how it will support them in the ongoing improvement of their RI program.
The DGPP recognizes that sustainability challenges and issues are complex and often require international consideration. Within its means, the DGPP works with partners and recognized players in the RI community to refine its expertise and share best practices. In a manner consistent with its RI leadership and Desjardins Group's commitments, the DGPP ratifies strategic collaboration initiatives, when deemed appropriate. Currently, the RRMD participates in three strategic collaborations related to its investment activities.
The DGPP public transparency report (2023) (PDF, 1610 Ko) presents a detailed account of the initiatives and processes used by the DGPP in recent years. For each category, PRI gave the DGPP a 4-star rating, which places it at the same level as its peers or above the median. These results show that the RI initiatives implemented in recent years are paying off. More than 650 international asset holders completed this questionnaire in 2023.
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Training
In order to foster a robust RI strategy across its investment activities, there is a continuing education program for members of DGPP’s governing bodies and teams to ensure that they consider RI in their decision-making process and in their respective business practices.