We believe that sound ESG governance is essential to the well-being of our business and our ability to generate long-term sustainable returns. As such, we are committed to the highest standards of governance.
Sustainability and ESG are fundamental to the way the Corporation, and the Power group of companies as a whole, do business― what the Corporation refers to as responsible management. At the core of the Corporation’s investment philosophy, responsible management has enabled the Corporation to build a resilient and sustainable business through its roles as a long-term active shareholder, and as an employer and contributor to the communities in which it operates.
The Corporation’s sustainability approach is rooted in this philosophy, as well as in its mission statement, Corporate Sustainability Statement and Code of Conduct, and is supported by several key corporate policies and statements including the Respectful Workplace Policy, the Environmental Policy and the Responsible Procurement Policy Statement. We also extend our responsible management philosophy to third parties that work for/on our behalf, through our Third Party Code of Conduct.
In addition, Power Corporation has strengthened its commitment to responsible management by becoming a signatory to the United Nations Global Compact (UNGC) in 2014, formally adhering to the UNGC’s Ten Principles on human rights, labour, environment, and anti-corruption. These Ten Principles have helped inspire our company’s culture, programs and initiatives, as well as our commitments and partnerships. Moreover, we have supported the UN’s 17 Sustainable Development Goals since their launch in 2015.
Responsibility for sustainability matters and ESG considerations at the Board level is assigned to the Governance and Nominating Committee, whose responsibilities include monitoring the implementation of the Corporation’s policy and strategy with respect to CSR, which includes ESG matters.
Sustainability and ESG risks and opportunities are reviewed by the Governance and Nominating Committee through the updates and progress reports provided annually by the Corporation’s ESG Lead, or more frequently as appropriate. The ESG Lead also provides an annual report to the Audit Committee on the implementation of the Code of Business Conduct and Ethics and of the Anti-Corruption Policy.
In addition, being responsible for administering our Cybersecurity Policy, the Vice-President and Controller reports to the Audit Committee of the Board of Directors as needed. For its part, the Human Resource Committee of the Board is responsible for overseeing the implementation of the Corporation’s Diversity, Equity and Inclusion Policy and ESG factors in compensation.
We believe that ESG considerations and the appropriate tone-from-the-top are an integral part of the CEO’s and other executives’ roles. This is why setting the tone for company culture, including espousing the Corporation’s ethics, overall values and approach to ESG factors, and playing a leadership role in the Corporation’s approach to risk awareness and management, and sustainability of business models are among our CEO’s and other executives’ responsibilities. As such, ESG objectives based on the Corporation’s ESG strategy are a specific category that form part of the executives’ overall annual objectives.
While our CEO plays an active role in reviewing and approving the ESG strategy, performance and reporting, formal responsibility for ESG has been delegated to the Vice-President and General Counsel, who is our ESG Lead and reports directly to the CEO.
The ESG Lead and his team are responsible for executing our ESG strategy, engaging with stakeholders and providing performance reports to the Governance and Nominating Committee. With the oversight of the ESG Lead, we also meet regularly with our group companies to align our commitments and share knowledge on ESG initiatives. A portion of the ESG Lead’s performance incentives is tied towards progress in integrating ESG into all facets of our business, including environmental, social and governance factors.
Unless otherwise specified in a particular policy or procedure, the Vice-President and General Counsel is responsible for implementing, monitoring and reviewing the Corporation’s ESG-related policies and procedures.
Progress reports on our ESG initiatives are provided annually to the Governance and Nominating Committee, or more frequently if deemed material. In 2022, there were no material ESG issues reported to the Committee.
As an active owner of the companies in which we invest, we strive to ensure that our governance practices preserve and enhance shareholder value in a manner consistent with our responsible management philosophy. Power Corporation is committed to this by actively managing operating businesses and investments to generate long-term sustainable growth, and aims to act like an owner with a long-term perspective and a strategic vision anchored in strong core values.
We invest in companies that share the same philosophy and commitment to acting responsibly and ethically, and to serving the wider community in general. Building on their strong foundation of sustainability, our major publicly traded operating companies are responsible for developing their own policies and programs, specific to their unique circumstances.
As part of our active ownership approach, we regularly engage with the senior management of our group companies, both formally and informally, and when questions or issues may arise, through our representation on their respective boards. By having our executives sit on the boards of our portfolio companies, we exercise active ownership through regular engagement with their senior management. This governance model, developed over a long period of time, allows us to ensure that our investments are being managed in a manner consistent with our responsible management philosophy and in line with our Corporate Sustainability Statement and our Code of Business Conduct and Ethics. In all these interactions, we have an open and constructive dialogue in order to ensure that we have a proper understanding of how their management teams manage sustainability, ensuring it is in a manner consistent with Power Corporation’s core values.
ESG Risk Management
We view responsible management, and all that it entails, as an effective means to mitigate risk and as a catalyst for long-term value creation, including with regards to ESG. We invite you to read more about our risk management approach by consulting the Risk Management section of our most recent Annual Report, as well as the Risk Oversight section of our corporate website and of our most recent Management Proxy Circular.