Climate change is, and will continue to be, the top environmental, social and governance (ESG) issue for pension giant the Canada Pension Plan Investment Board (CPPIB).

In its annual report on sustainable investing, which was released Wednesday, the CPPIB details its work over the past year on the issue of climate change and singles out climate-related risks and opportunities as the top issue for the year ahead.

According to the report, the CPPIB has undertaken a bottom-up initiative requiring its investment teams to analyze the climate-related risks and opportunities for every major investment they consider.

“The sustainable investing team will continue to play a leadership role in developing our firm-wide view of climate change and tools to better identify and assess specific risks posed by climate change to the fund,” it says.

In 2020, it will be incorporating the lessons from its securities selection efforts to “assess climate change risks and their impact on the risk/reward profiles of certain investments.”

The board also intends to beef up its ESG database and research, which can be utilized both as part of its investing process and when engaging with companies in its portfolio to “enhance the value creation/protection elements of these investments.”

In real terms, the CPPIB reports that its investments in global renewable energy companies more than doubled in the year to June 30, to $3 billion — up from just $30 million in 2016. Overall, the fund has more than $400 billion in assets under management.

“Over the past year, we advanced our goal to be a leader among asset owners in understanding the risks posed, and opportunities presented, by climate change,” said Mark Machin, CPPIB president and CEO, in a statement.

“We’re mindful that fully understanding the implications of climate change — including physical, transition and adaptation risks — will be a continuous process.”

Alongside climate change, gender diversity on corporate boards is also a top ESG issue for the CPPIB, which reports that it expanded its efforts to improve board diversity among its portfolio companies last year.

For example, it has started voting against nominating committee chairs for boards with no female directors, which saw it vote against 626 directors during the 2019 proxy season.