1. How are members of the Board of Directors appointed?

2. As you continue building your equity and inflation-sensitive assets, will you also maintain a large government bond portfolio?

3. What proportion of the assets are invested in stocks?

4. What is the projected growth of CPP assets?

5. Why don't you invest only in Canada to create economic growth and jobs?

6. Is the CPP Investment Board really independent of government?

7. How is the CPP fund protected from political interference?

8. Why has the CPP Investment Board committed to the Policy on Responsible Investing?

9. How is the Policy on Responsible Investing different from your previous Social Investing Policy?

10. Why don't you use positive or negative screens when making investment decisions?

11. Different groups of Canadians believe that the CPP fund should not be invested in various industries or companies ranging from defence stocks and genetically modified foods to tobacco and open pit mining. Why don’t you take these views into account when investing the CPP fund?

12. Why does the CPP Investment Board want to invest in infrastructure?

1. How are members of the board of directors appointed?

The nomination process is designed to ensure that only those with expertise in investment, business and finance are appointed to the board. See CPP Investment Board Act.

Directors are appointed by the federal finance minister in consultation with the participating provinces, and with the assistance of a nominating committee. Each director is appointed for a term of three years and is eligible to be reappointed twice for a maximum of three terms or nine years of service. The federal government appoints the chair of the nominating committee, and each participating provincial government appoints one representative.

The nominating committee recommends candidates for appointment and re-appointment to the federal finance minister who, in turn, makes the appointments in consultation with the provincial finance ministers.

For more information see members of the board.

2. As you continue building your investment in equity and inflation-sensitive assets, will you also maintain a large government bond portfolio?

Yes. Bonds or fixed income securities will remain an important part of our diversified portfolio. Our bond portfolio is currently $25.3 billion, or 25.7 per cent of the CPP fund. The majority of the bonds we hold are provincial and federal government bonds.

3. What proportion of the assets are invested in stocks?

Publicly traded stocks make up 58.3 per cent of the CPP fund.   Our current asset mix is as follows:

4. What is the projected growth of the CPP fund?

Within the next decade the CPP fund will grow to be the largest pension fund in Canada and one of the largest in the world. The Chief Actuary of Canada estimates that the CPP fund will grow to $250 billion within a decade.

5. Why don't you invest only in Canada to create economic growth and jobs?

Our mandate is to contribute to the financial strength of the CPP by investing in the best interests of 16 million CPP contributors and beneficiaries and by maximizing returns without undue risk of loss.

Almost two thirds, or $63 billion, of the CPP fund is currently invested in Canada. The dollar amount of investments in Canada will continue to grow over time but will decline as a proportion of the fund.

Over time, we will be investing a higher proportion of the fund in international investments to further diversifying the CPP fund. A strategy that invests predominantly in Canada would not be in the best interests of CPP contributors and beneficiaries. First, it is important to diversify risk exposure beyond the relatively small Canadian economy. Second, greater global diversification allows income from foreign investments to flow back into Canada to support our future pension payments. Third, there are attractive economic sectors available globally that are small in Canada, such as the pharmaceutical industry, computers and branded consumer products. These sectors help to diversify the assets.

6. Is the CPP Investment Board really independent of government?

We were created to operate at arm's length from governments and to make independent investment decisions. As enshrined in the Canada Pension Plan Investment Board Act, the board of directors approves our investment policies and management makes investment decisions consistent with the approved policies. Management is accountable to the board of directors of the CPP Investment Board.

However, as a Crown corporation, we are accountable to Parliament through the federal minister of finance and to the federal and provincial finance ministers, who are responsible for the Canada Pension Plan.

7. How is the CPP fund protected from political interference?

In the event a politician were to try to influence our investment decision making, we would remind the individual, in writing, of the CPP Investment Board's arm's length relationship to government and the political process.  Further, the incident would be reported to our board of directors for review and action if warranted.

8. Why has the CPP Investment Board committed to the Policy on Responsible Investing?

We have reviewed the emerging trends, standards, and initiatives regarding social investing among institutional investors in Canada and internationally.

The centerpiece of the Policy on Responsible Investing is a commitment to engage with companies to encourage improved performance and disclosure of environmental, social and governance (ESG) factors.

Our commitment to engage with companies refers to the use of our ownership position in some 2,600 companies to encourage improved performance on ESG factors. We do this by exercising our proxies, by joining coalitions of like-minded investors and through direct contact with companies.

We believe long-term responsible corporate behaviour with respect to ESG factors can generally have a positive influence on long-term corporate financial performance.

The Policy on Responsible Investing is consistent with our mandate and fiduciary duty and complements our investment objective and reflects the stage of development of the CPP fund and the current investment strategy of the CPP Investment Board.

9. How is the Policy on Responsible Investing different from your previous Social Investing Policy?

Our revised approach to responsible investing builds on our previous work in the Social Investing Policy and our Proxy Voting Principles and Guidelines.

The Policy on Responsible Investing goes beyond our previous policy to build an engagement capability to encourage improved performance and enhanced disclosure of environmental, social and governance (ESG) factors in companies in which we invest.

We believe long-term responsible corporate behaviour with respect to ESG factors can generally have a positive influence on long-term corporate financial performance.

We are committed to a strategy of engagement on ESG factors at the policy level and we look at these factors through the lens of our investment objectives.

This revised approach remains consistent with our mandate and fiduciary duty and complements our investment objectives. In general, our commitment to engage with companies refers to the use of our ownership position in some 2,600 companies to encourage improved performance on ESG factors. We do this by exercising our proxies, by joining coalitions of like-minded investors and through direct contact with companies.

10. Why don't you use positive or negative screens when making investment decisions?

We believe that screening increases portfolio risk and diminishes returns over time. As a result, our approach to responsible investing focuses on engagement, not screening.

Engagement is widely recognized as an effective strategy for large institutional investors with long-term investment horizons. In general, engagement refers to the use of our ownership position in some 2,600 companies to encourage improved performance on and disclosure of environmental, social and governance (ESG) factors. We do this by exercising our proxies, by joining coalitions of like-minded investors and through direct contact with companies.

We believe engagement on ESG factors is more effective in the long-term than screening. This is consistent with the approach taken by European institutional investors.

Many issues pertaining to responsible investing relate to the ownership of publicly-traded equities. Most of our holdings in public companies are the result of our universal investor approach to publicly-traded equities, where we tend to seek long term investments. Using a universal investor approach means that in our public equity portfolio we do not pick individual stocks.

This approach enables the CPP Investment Board to invest large sums of capital in diverse business sectors in Canada and internationally in an efficient and cost-effective manner.

11. Different groups of Canadians believe that the CPP fund should not be invested in various industries or companies ranging from defence stocks and genetically modified foods to tobacco and open pit mining. Why don’t you take these views into account when investing the CPP fund?

While we do not use positive or negative screens in our investing, we do take into account many of the issues that concern Canadians to determine the potential affect of environmental, social and governance factors on the company’s long-term performance.

We look at ESG factors only as investment criteria from a risk/return point of view and we are beginning to integrate these factors into our investment process.

12. Why does the CPP Investment Board want to invest in infrastructure?

Infrastructure is an attractive asset class for the CPP Investment Board and for most other large pension funds in Canada

Infrastructure is a broad category that means different things to different people. At this stage in the development of CPP fund, we are looking at specific types of infrastructure investments. These include local distribution networks for electricity, water and gas, and certain transportation assets, such as bridges and tunnels.