Though there are no ETIs in Canada, strictly speaking, comparable asset-targeting has emerged that treats pursuit of collateral benefits as a prudent and legitimate secondary aim of investing, after optimal earnings. Some of these also enjoy the support of local unions.
Associated with this new focus is some Canadian union promotion of methods for introducing social responsibility criteria, screens and accounting procedures to pension asset allocations, similar to those performed by ethical and environmental mutual funds and several labour-sponsored funds. Newer still is an effort to link social criteria with pension asset management, in the form of shareholder activism. Indeed, national labour movements around the world are seizing on the potential such activism offers in influencing corporate citizenship and governance.
It was in response to growing interest among unions and union members on this topic that the Canadian Labour Congress recently introduced policies endorsing greater exploration of pension investment issues at the national level. A vital prerequisite for many in the labour constituency is establishment of a more central and authoritative role for employees and other plan members in pension governance and investment decision-making.Endnote 6
Prudence, Patience and Jobs discusses the connection between the investment management of Canadian pension assets and job-creating SME and larger firms, both traditional and non-traditional, through private and public capital markets. It also considers what opportunity now exists for enhanced pension participation in solving capital availability problems in a manner that helps meet the new economic and social priorities of the country, as desired by many in both the Canadian business and labour constituencies.
In a very real sense, the governance of employer-sponsored pension funds has for a long time reflected an amount of labour-management co-operation, consensus-building and joint decision-making, in both the private and public sectors. This is most evident in joint trusteeship, the incidence of which has grown markedly since the 1980s (see Investing and Managing Pension Assets in Canada), as well as other administrative arrangements wherein employers formally share decision-making with employees or otherwise seek the input of plan members.
In addition, it has been pension governance structures featuring employer-employee co-operation that have given rise to new and innovative strategies for asset-targeting or otherwise expanding capital market participation. Jointly-trusted public sector funds and private sector multi-employer funds, for example, have frequently shown leadership in developing strategies that effectively reconcile prudence, fiduciary responsibility and investment activity that facilitates a strong and healthy economy.
There exists a certain degree of common ground between business and labour. This was also apparent in consultative exercises undertaken by the CLMPC in the past few years, beginning with the 1992-93 economic restructuring initiative involving senior labour and management leaders from across the country. More recently, a bipartite task force of the CLMPC convened in 1994-95 with a mandate to study, discuss and make recommendations concerning SME access to capital, a process that concluded with the report Generating Growth.
In light of this experience, Canada's business and labour constituencies are well-positioned to articulate their mutual concerns on this topic. This they might do in further co-operation with government in all Canadian jurisdictions, given that the concerns felt and expressed by legislators and public policy-makers are, in tone and content, very similar to those of business and labour.