BCI representative Coulson expresses confidence in private markets as platforms for active participation
The British Columbia Investment Management Corporation (BCI), one of Canada's largest institutional investors, is focusing its efforts on stewardship in private markets to achieve its climate goals and manage climate risk. With approximately $250bn worth of investments under management, BCI is making significant strides in promoting sustainability and reducing carbon emissions.
BCI engages its general partners to align expectations, exchange expertise, and collaborate on longer-term opportunities in private markets. This collaborative approach is essential in private markets where investors prioritize longer-term outcomes, working alongside companies to deliver value from sustainability initiatives over time.
To facilitate this collaboration, BCI has developed a data platform that automates and provides on-demand access to climate information. This platform helps BCI and its partners track progress, identify opportunities, and measure the impact of their sustainability initiatives.
BCI has also grown its ESG teams embedded in private equity and infrastructure programs. These teams work closely with portfolio companies to identify ESG-related opportunities for value creation. One example of such a portfolio company is PS Logistics, a leading flatbed truck transportation and logistics provider in the US.
However, the lack of standardization among companies in private markets, particularly around disclosures, can make benchmarking and industry-level analysis more challenging. Despite this, BCI prioritizes material issues and opportunities for engagement, focusing its time and effort where it can have the highest impact in both public and private markets.
In private markets, institutional investors can exert significant influence over companies in their portfolios, particularly when they have larger direct ownership stakes and governance rights. Last year, about 50% of BCI's private equity fund portfolio general partners were engaged with on ESG and climate-related opportunities.
BCI conducts deep-dive educational sessions to showcase leading practices in ESG integration with its private equity fund portfolio general partners. Moreover, BCI has engaged extensively with five portfolio companies in its private equity program, representing $1.6bn in net asset value, to establish and quantify ESG-related initiatives.
BCI's portfolio is managed on behalf of 29 British Columbia public sector clients, including 10 public sector pension funds, three insurance funds, and various special purpose funds. About half of BCI's investments are in private markets.
One of BCI's climate ambitions is to ensure at least 80% of carbon-intensive investments have set net-zero aligned commitments by 2030. BCI has engaged companies in the past to improve their climate impacts, although specific company names are not mentioned in the available search results.
In public markets, change can happen, but it may be slower due to a broad and diverse shareholder base. Nevertheless, BCI continues to advocate for sustainability and climate action in all its investments, demonstrating its commitment to a more sustainable future.
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