“I think the country has been really well served by the simplicity of the mandate we were given back in the CPPIB Act in 1997, which is to maximize returns without undue risk of loss,” Machin told the committee at one point,
CPPIB may operate at arm’s length from both federal and provincial governments, but its directors are appointed by the federal finance minister in consultation with the provinces and a nominating committee. And while the investment manager may see its mandate as relatively straightforward, the organization’s increasing importance and influence means carrying out its objectives is becoming more and more fraught with pitfalls of both the political and public-relation variety.
“Political leaders, even with our independence, they still expect us to do our homework,” Leduc said. “And that means being available to Canadians.” “Our governance structure and clarity of mandate are internationally recognized as a leading example, for other countries to emulate, of sound management of national retirement plans,” Machin told the committee back in June.
“It’s very important for us to thoroughly understand all the risks of investing in any market, not just at an individual security level or an individual company level but also the risks of the market overall and where they might be going,” Machin said. “We spend a lot of time understanding those risks.”Photo by Fred Dufour/Pool/AFP via Getty Images filesMachin was asked in June about CPPIB’s approximately US$600-million investment in Chinese fintech firm Ant Group Co.
Amid growing pressure for institutional investors to choose ESG options, CPPIB faces a double burden due to Canada’s oil and gas sector.Machin said in June that the organization does consider ESG factors, and that it has “committed to being a leader among asset owners in understanding the risks posed and opportunities presented by climate change.”