A C$2.3trn coalition of Canadian investors has been set up to engage the country’s listed companies on making boards and senior management representative of the “racial and ehnic demography” of Canada.
Addenda Capital, AGF Investments, Alberta Investment Management Corporation, Caisse de dépôt et placement du Québec, Desjardins, Mackenzie Investments, NEI Investments, OPSEU Pension Trust and University of Toronto Asset Management are founding signatories to the pledge, which is coordinated by Canada’s Responsible Investment Association (RIA).
BMO Global Asset Management and British Columbia Investment Management Corporation are also supporters.
Signatories promise to “integrate diversity & inclusion into their investment processes” by monitoring the practices of portfolio companies, and pushing for relevant disclosure. They expect companies to “aim for the adoption of policies, targets and timelines to improve diversity on boards and in senior management”.
The investors also commit to taking “concrete steps” to advance their own diversity by “providing training to foster inclusive cultures, collecting data to identify and address any barriers to the advancement of underrepresented groups, and seeking out underrepresented voices to inform diversity and inclusion activities”, in addition to reporting on their progress.
Dustyn Lanz, CEO of the RIA, said: “Acknowledging the existence of systemic racism is a recognition that we have a lot of work to do to level the playing field in business and society. These investors are stepping up to do the work because it’s the right thing to do, and because there’s a strong business case for doing so.”
The initiative welcomes the participation of other institutional investors; the pledge can be signed here.
Separately, listed companies based in California now face a mandatory requirement to appoint at least one ethnic minority or LGBTQ board member by 2021, under new laws signed yesterday by Governor Gavin Newsom. Additionally, firms with more than four directors but fewer than nine, would require a minimum of two minority or LGBTQ directors.
Companies with more than nine directors must appoint at least three directors from the under-represented communities identified in the directive, but have until 2022 to comply.
Companies in breach of the new law could be fined between $100,000 and $300,000, according to the State Assembly.
In 2008, California introduced similar legislation requiring corporations to appoint women to their boards under the administration of former Governor Jerry Brown.