The Healthcare of Ontario Pension Plan is planning to reduce the greenhouse gas emissions of its $20 billion real estate portfolio.
According to a new report on the pension fund’s website, the HOOPP is committing to reducing its real estate portfolio’s greenhouse gas emissions entirely by 2050 for assets under its control. To do this, it’s identified three key factors expected to help the organization reach its target.
The first factor is the need to set interim goals in order to reach its overarching goals. As an interim target, it will aim to cut emissions for its real estate assets to 50 per cent of their 2019 levels by 2030. “We selected 2030 as our end-year because it is a medium-term time horizon that provides the right balance of urgency with sufficient time to plan and invest in energy reduction and decarbonization. Setting interim targets is necessary to ensure we are on pace to achieve the fund’s long-term goal of net-zero carbon emissions by 2050.”
The second factor is the pursuit of an engagement strategy aimed at securing the buy-in of multiple stakeholders, including its various independent property managers. So far, this strategy has included the release of a quarterly newsletter on sustainability. Its sustainability committee has also reached out to stakeholders through regular calls with property managers designed to generate support for and an understanding of the HOOPP’s targets.
The third factor is to help each property management team prepare each part of the portfolio for carbon reduction. To do this, the HOOPP has created a custom emissions planning tool to be used by each property management team. “The tool included property baseline emissions and allowed managers to forecast future greenhouse gas reductions based on grid decarbonization and planned investments such as energy efficiency projects, on-site solar installations or purchases of renewable energy credits.”
In 2022, the HOOPP will also pursue four new strategies to further its overall emissions reduction goal. It will implement systems to monitor the execution of carbon reduction plans at individual properties, integrate emissions reductions opportunities into capital planning, establish an emissions reduction strategy for new developments and one for acquisitions.
In response to the new report, Shift Action for Pension Wealth and Planet Health, a charitable organization that tracks the fossil-fuel and climate-related investments of Canadian pension funds, welcomed the new plan and called for the HOOPP’s efforts to reduce emissions to be broadened to apply to the entirety of its $114-billion portfolio.
It also criticized the plan for only applying to buildings over which the HOOPP has operational control, but praised its targets as being “a significant mid-term commitment on the path to net zero.
“While the real estate carbon reduction goal does not take into account scope 3 emissions and covers the emissions from only those buildings over which HOOPP has operational control, the target is a significant mid-term commitment on the path to net zero across the fund’s entire portfolio. It’s a clear demonstration of progress to see HOOPP set an absolute emissions target instead of the emissions intensity targets typical of Canadian pension funds and their real estate subsidiaries.”