On October 21, 2015, the Financial Services Commission of Ontario (FSCO) released its investment guidance note on environmental, social and governance (ESG) factors (Guidance Note) in final form. A draft version of the Guidance Note was previously released for public consultation on June 29, 2015.
The stated purpose of the Guidance Note is to provide information and guidelines to administrators of Ontario registered pension plans with respect to ESG factors in order to assist administrators in meeting the requirements of section 78(3) of Regulation 909 (Regulation) under the Pension Benefits Act (Ontario) relating to statements of investment policies and procedures (SIPPs). Effective January 1, 2016, these requirements include disclosure in the SIPP as to whether ESG factors are incorporated into the plan’s investment policies and procedures and, if so, how such factors are incorporated.
In order to comply with the new SIPP requirements relating to ESG factors, administrators must make a decision as to whether or not to incorporate ESG factors into their investment policies and procedures and document this position in the plan’s SIPP by January 1, 2016.
In addition, administrators will need to file their SIPPs and any amendments to their SIPPs with FSCO in accordance with the following deadlines:
- Pension plans registered before January 1, 2016: the SIPP must be filed by March 1, 2016
- New pension plans registered on and after January 1, 2016: the SIPP must be filed within 60 days after plan registration
- Amendments to a SIPP must be filed within 60 days after the date of the amendment