FONDS de solidarité FTQ

rapport annuel et
de développement durable 2012

English
Table des matières
français

ETHICS AND GOVERNANCE

Our governance structure

The challenges of sustainable development and social responsibility require companies to be efficient and transparent. Their various governing bodies must also be increasingly accountable.

To further strengthen and consolidate its governance, the Fonds continued, during the last financial year, to update the management policies, standards, guidelines and procedures it has implemented over the years.

A new charter

The Fonds has developed charters over the years, including the Board of Directors, the Executive Committee, the Financial Assets Management Committee and the Audit Committee charters. The Fonds also adopted a new charter during the last financial year: the Ethics Committee Charter.

www.fondsftq.com/charte-ca (in French only)

The Fonds governing bodies

In addition to its Board of Directors, the Fonds de solidarité FTQ has set up boards and committees, including the Management Committee, which manages the day-to-day operations of the Fonds. Among those governing bodies, the four Special Boards of the Fonds de solidarité FTQ and the governing bodies of the Fonds immobilier de solidarité FTQ are responsible for authorizing the development capital investments of less than $5 million and for recommending investments of $5 million or more to the Board of Directors.

To learn more about our governance structure and the management framework of the Fonds de solidarité FTQ, refer to our Management Discussion and Analysis, download the pdf version of our ASR on SEDAR or our website, as well as the list of members of our governing bodies presented in this report.

Strict financial controls

The Incorporation Act of the Fonds de solidarité FTQ states that the Autorité des marchés financiers is responsible for inspecting the internal affairs and activities of the Fonds to verify compliance with this Act, in addition to other functions it carries out in regards to the Fonds, which is a reporting issuer as defined in the Securities Act.

In addition, while not required to apply Regulation 52-109 respecting certification of financial disclosures in annual and half-year documents, the Fonds, determined to comply with governance best practices, decided to base its work on the principles stated in this rule. To that end, the Fonds implemented several years ago a financial compliance framework program called Confor. This program covers the controls needed to provide reasonable assurance that the financial information prepared and reported by the Fonds is reliable and that the financial statements are prepared in accordance with Canadian generally accepted accounting principles.

The management of the Fonds de solidarité FTQ is responsible for designing and maintaining internal control over financial reporting and disclosure controls and procedures. It must also periodically evaluate their design and effectiveness.

Among the other controls in place to ensure the rigour of its management and practices, the Fonds undergoes a complete financial statement audit process twice a year, which is under the responsibility of two external audit firms: Samson Bélair/Deloitte & Touche and Raymond Chabot Grant Thornton.

The United Nations Global Compact

We should recall that the Fonds de solidarité FTQ, always in order to act in the best interests of its shareholders-owners and in keeping with its values and practices, had already adhered in 2009 to the United Nations Global Compact, which relates to human rights, labour standards, the environment and anti-corruption.

Download the PDF version of our ASR to consult the GRI Index

Training and information tools

In February 2012, the Fonds collaborated with Johanne Gélinas, a professional experienced in sustainable development (SD) to offer training to ensure that SD and socially responsible investment (SRI) issues are well understood. This training was first given to 110 specialists of the Investments and Other Investments sectors and, afterwards, to the members of its Management Committee and Board of Directors. It highlighted many things, including certain expectations of our specialists with respect to monitoring and tools, for which specific objectives are set out in this report. In particular, the Fonds will prepare, for the specialists of the Investments sector, a carbon credit information and intervention guide.

The Fonds will also provide the training on SD and SRI issues to the professionals of its regional investment network.

Directors and Bill 89

In October 2011, the National Assembly passed an Act to amend the Environment Quality Act in order to reinforce compliance, also called Bill 89. This act amending the Environmental Quality Act (EQA) grants new powers to the Ministry of Sustainable Development, Environment and Parks, sets out new monitoring mechanisms and increases the liability of company directors and officers with respect to environment protection.

This is why the Legal Affairs Department of the Fonds provided training on Bill 89 to the specialists of the Investments sector so that they can better support the integration of these new standards into our partner companies' practices.

In addition, we will prepare a guide on the EQA, which will include measures that companies must take to manage risks related to environment protection. This guide will mainly be intended for specialists of the Investments sector who are corporate directors and external directors who represent the Fonds on the board of directors of its partner companies.

Sustainable development and the mining industry

The Fonds de solidarité FTQ formalized, with other institutions involved in the industry, certain guidelines for practices related to sustainable development and social responsibility in mining project management. The Fonds therefore requires that mining companies in which it invests in Québec undertake to implement, within six months, a sustainable development plan that takes into account the main corporate social responsibility principles issued by recognized international organizations.

For instance, mining companies must diligently take, in all their exploration activities, technically proven and economically feasible measures to protect the environment and ensure the health and safety of workers. They must also assume their social responsibility for the communities in which they operate and responsibly use the resources available on the territory.

see the guidelines

Shareholder commitment

The Fonds de solidarité FTQ is a committed shareholder when it comes to voting and engaging in dialogue with the listed companies in which it has invested. The Fonds is also proud that more than ten years ago it was one of the first large institutional investors in Québec to have developed guidance on voting rights.

This guidance expresses our desire for these companies to commit to adopting policies on major environmental and social issues and those related to sound governance and respect for human rights.

www.fondsftq.com/vote-entreprises (in French only)

Engaging a dialogue with businesses!

The Fonds de solidarité FTQ partnered, during the last financial year, with SHARE (Shareholder Association for Research & Education), a not-for-profit organization and Canadian leader in responsible investment for institutional investors. SHARE offers support services to these investors and it conducts research and provides education in this field.

As an investment fund aiming to hold diversified financial assets, the Fonds invests in particular in Canadian large-capitalization securities and therefore becomes a shareholder of the issuing companies. By its presence, the Fonds takes up space it considers fundamental: by "occupying businesses" - to borrow the slogan of the protesters of the Occupy Wall Street movement - the Fonds puts itself in a position to try, for instance, alongside other Canadian institutional investors, to propose directly to these companies' executives improvements that it would deem necessary or to require more transparency and accountability from them.

This is the dialogue that SHARE now engages in for the Fonds de solidarité FTQ, pursuant to an agreement entered into in the past months. This committed shareholder position already allowed the Fonds to vote at annual shareholders' meetings and cause companies to implement more socially responsible practices, especially on the environmental and social fronts.

SHARE's clients include pension funds, mutual funds, foundations, faith-based organizations and asset managers from across Canada. Its leadership on responsible investment is both national and international. The organization is a signatory to the United Nations Principles for Responsible Investment (PRI) and a Global Reporting Initiative (GRI) stakeholder.

Mario Tremblay, Vice-President, Public and Corporate Affairs of the Fonds de solidarité FTQ has become a member of SHARE's board of directors, which is chaired by Ken Georgetti, President, Canadian Labour Congress.

The Fonds, a signatory to the PRI

At its September 2011 annual general meeting, the Fonds adhered to the six Principles for Responsible Investment (PRI) issued by the United Nations Environment Programme Finance Initiative (UNEP FI). Afterwards, the Québec signatories to the PRI held, in January 2012, an initial meeting at the Fonds de solidarité FTQ. Information sharing meetings have been regularly held since, and shared projects are developed, which puts into practice one of the principles: working together to promote the PRI.

As of July 2012, there were 1,084 PRI signatories around the world, of which 43 companies and organizations are in Canada. Québec now counts more than 20 signatories, including the Caisse de dépôt et placement du Québec, Bâtirente, Desjardins Funds and Fondaction CSN, as well as partner companies of the Fonds de solidarité FTQ, including SSQ, Life Insurance Company, Montrusco Bolton Investments and HR Strategies.

See the PRI commitments

The Fonds, an investor affiliated with the HFSB

In March 2012, the Fonds has committed, with some 60 hedge fund managers, to comply with the standards of the Hedge Fund Standards Board (HFSB), a standard setting body for the hedge fund industry. The standards of which the HFSB is the custodian provide a powerful mechanism for creating a framework of transparency, integrity and sound governance that maintains the industry's good reputation, facilitates investor due diligence and complements public policy, thus serving the interests of all market participants and of the economy at large.

The HFSB brings together hedge fund managers, regulators and consultants from around the world to help determine how the hedge fund industry should operate. Some 60 major international investors, including pension and endowment funds, sovereign wealth funds and funds of funds, have also embraced the HFSB as members of its Investor Chapter to drive adoption of the standards.