ROUNDTABLE: LIFE RE
Q6: WHAT MIGHT ESG MEAN FOR YOU AND THE SECTOR AS A WHOLE?
“Diversity in the workforce drives better outcomes for shareholders.”
Allison Pedro
Pedro: Environmental, social and corporate governance (ESG) factors are a significant focus for Sun Life and a pivotal component of our broader commitment to sustainability. We recently added a chief sustainability officer to our corporate executive team. We have strict investment rules to promote ESG, which is significant given the assets managed globally.
Second, Sun Life’s executive leadership team is actively committed to gender parity, in the long term and the immediate term, as well as having one-quarter of senior leadership come from underrepresented communities.
Diversity in the workforce drives better outcomes for shareholders. That is a big focus for Sun Life. We are proactive and have implemented many solid actions to support ESG effectiveness.
“ESG is embedded within the Brookfield culture.”
Faisal Haddad
Haddad: In general, the insurance industry plays a crucial role in ESG due to its role as a risk manager, risk carrier, and, most importantly, a significant investor. And the focus should be not just on sustainable activities but on looking forward to the impact of the investments and the activities they undertake.
As Brookfield is one of the largest infrastructure and renewable energy investors, ESG is embedded within the Brookfield culture, and it’s fully integrated into how we acquire and operate our businesses to create value for the long term.
It is in focus, and it was the focus during Brookfield’s investor day a month ago. We are moving forward with ESG insight and on the agenda.
“ It is very ingrained into pretty much every decision.”
Kevin Hovi
Hovi: It’s a high priority. As a new company, we have been able to implement ESG in combination with our acquisitions and subsequent build out of the platform including hiring. It is very ingrained into pretty much every decision we’re making right now, whether it’s board representation, hiring practices or our investment strategy.
We do see it come up most often in our investment portfolio where ideally you have pretty strong linkage between the strength of a credit and the strength of its social responsibility.
Talarek: When you look at our portfolio liabilities, you can see that we have cash flows that might go out to 50, 60, or 70 years or more. So long, in fact, that by then I’ll be dead. >>>
“I see ESG as a moral obligation.”
Kai Talarek
<<< So the question we ask is: “How do we invest in the face of such a long-term obligation?”
There is a distinct dimension in ESG that says we want to be a force for the greater good. And that’s very valid as an objective.
But it’s also simply good risk management to open your eyes and acknowledge the fact that the world is changing and that when you are a long-term investor, you need to take that reality into account.
I see ESG as a moral obligation. but also an opportunity to create long-term value by being disciplined, taking seriously what’s happening, and investing accordingly.
Image courtesy of Shutterstock / Reimar
