The Investment Management Corp. of Ontario is allocating 20 per cent of its portfolio to climate solutions by 2030, aiming to reduce its carbon emissions by 50 per cent compared to 2019, according to a new report by the investment organization.

In a press release, Rossitsa Stoyanova, the IMCO’s chief investment officer, said the investment team is pursuing long-term sustainable solutions and wants to capitalize on opportunities pushing for a low-carbon economy. “We have taken a pragmatic and bottom-up approach to our investments, ensuring that each asset class is investing in climate solutions and contributing to our net-zero targets.”

The types of climate solution investments that the IMCO is targeting as part of its entire environmental, social and governance strategy are: energy efficiency and clean technology, green buildings, clean transportation, climate change adaptation, circular economy and recycling, pollution prevention and emissions control, sustainable agriculture and natural capital, sustainable water and wastewater management and terrestrial and aquatic biodiversity.

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One of the IMCO’s biggest challenges in advancing its ESG approach is the ability to source accurate data on greenhouse gas emissions for assets in the portfolio, added Stoyanova.

Bert Clark, president and chief executive officer of the IMCO, said the past five years have laid the groundwork for integrating ESG across its investments and operations. In addition, the organization is incorporating ESG into its business beyond its investment strategies, including in its hiring practices and employee development.

The report also stress-tested the resilience of the IMCO’s portfolio against several climate risks in a time range between 2050 and 2100. The risk analysis, according to the report, will help provide a snapshot of transition and physical risks that could affect the assets under management.

“In general, the results continue to show relatively small losses across our portfolios compared with benchmarks and underscore our portfolio’s resilience to climate risks,” said Clark.

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