The Board’s fiduciary duty, which means holding a relationship of trust and confidence to manage and protect the funds of the Plan, is to maximize investment returns without undue risk of loss. While LAPP cannot invest based on non-financial criteria, we recognize that companies that adopt good governance and responsible practices can be expected to enhance shareholder value, which is consistent with our investment goals.
The Board’s strategy with respect to responsible investing is to work with AIMCo to obtain the highest risk-adjusted return while encouraging AIMCo, through shareholder advocacy and proxy voting, to promote the adoption of responsible policies and practices by companies as a means of maximizing long-term shareholder value. AIMCo will focus on finding the best risk-adjusted return for our LAPP members while also considering the positive or negative impact that environmental, social and governance factors are likely to have on long term risk and return.
AIMCo has been a signatory to the Untitled Nations Principles of Responsible Investment (UNPRI) since 2010 and is a party to a number of responsible investment initiatives that deal with environmental, governance and social principles. You can read more about responsible investment by AIMCo on the AIMCo Website.
Responsible Investment is covered in LAPP’s Statement of Investment Policy and Goals (SIP&G) and the Board continues to review AIMCo’s responsible investment practices in respect to the voting of proxies and shareholder advocacy. While LAPP recognizes that Plan assets are invested primarily through pools, as much as practical, AIMCo is encouraged to invest in companies with the intent to maximize value by use of constructive policies and practices that may relate to environmental, social and governance factors.