Ontario Teachers’ Pension Plan (OTPP), one of Canada’s largest investors, with over $225 billion in assets under management, announced today a series of interim targets to significantly cut portfolio emissions, on the pathway to its target to reach net zero from investment activities by 2050.
The company’s goals include targets to reduce portfolio emissions by 45% by 2025, and by 67% by 2030, on a 2019 basis. The targets encompass OTPP’s investments in real assets, private natural resources, equity and corporate credit holdings across public and private markets, and include external managers as well.
Jo Taylor, OTPP President and CEO, said:
“As an active, global investor, we play a critical role in helping accelerate the transition to a net-zero economy. Given the scale and complexity of our investment portfolio, we believe this is an ambitious plan that will meaningfully lower emissions and contribute to the plan’s long-term sustainability.”
The release of the new goals follows Ontario Teachers’ announcement earlier this year of its commitment to achieve net zero emissions by 2050.
OTPP outlined several of the initiatives it will follow on the pathway to reaching its portfolio climate goals. Key aspects of the plan include significantly growing investments in companies that generate clean energy, reduce demand for fossil fuels and build a sustainable economy, pivoting asset class strategies increasingly towards green investments, investing in transition assets to secure future direct and tangible reductions in carbon emissions, and issuing green bonds and investing the proceeds in climate solutions and sustainable companies. Additionally, the investor aims to set portfolio companies on a clear path to implement Paris-aligned net-zero plans and meaningfully reduce emissions, advocate for clear climate policies and partner with other industry leaders to effect global change. OTPP will report annually on progress against the 2025, 2030 and 2050 targets.
Ziad Hindo, OTPP Chief Investment Officer, said:
“Climate change permeates the entire investing landscape. Tackling it requires substantial effort and massive amounts of capital. By significantly growing our portfolio of green investments and working collaboratively with our portfolio companies to transform their businesses, we can make a positive impact by encouraging an inclusive transition that benefits our people, communities and portfolio companies.”