Vestcor Inc. reduced the carbon exposure to several of its portfolios throughout 2022, according to its annual responsible investing report.
The New Brunswick-based investment organization reported its Canadian, global and emerging markets portfolios all saw declines in carbon exposure by nine per cent, 13 per cent and nine per cent, respectively. The portfolios also retained their investment targets and risk parameters throughout the reporting period.
“We advocate that the companies in which we invest provide detailed reporting and disclosure on their environmental, social and governance risk exposures and the strategic initiatives and risk management governance process being utilized to mitigate related risks and meet global best practices and regulatory targets,” the report noted.
Private assets such as real estate, infrastructure and private equity joined public equities and corporate bonds to round out the types of assets included in the overall carbon footprint calculation. The calculus now includes 83 per cent of the organization’s total investments, compared to only 53 per cent in 2021. The financed emissions intensity declined 9.2 percentage point to 51.6 in 2022, compared to 56.6 in 2021.
Vestcor’s report reaffirmed its commitment to reaching net-zero greenhouse gas emissions by 2050 by highlighting the types of investments it pursued in 2022, including a company working on the electrification of commercial vehicles on a global basis and an electric and natural gas services company based in the U.S.
In terms of green real estate investments, the report noted one of the investment organization’s existing asset, a 25 per cent stake in Arthur Erickson Place in Vancouver, B.C., is forecasting an 81 per cent reduction in carbon emissions by 2024, compared to a 2019 baseline.
In addition, the report noted a review of Vestcor’s investment portfolio through climate risk scenarios over the next 15 years found both physical and transition concerns could impact its assets.