The United Nations’ Net-Zero Asset Owner Alliance — an association of financial organizations that includes the Caisse de dépôt et placement du Québec — is incorporating intermediary environmental targets as it continues its push to net-zero emissions by 2050.

In addition to the new environmental reporting targets for asset owners, the association’s guidance now includes private assets, such as private debt funds, directly held private debt, directly held real estate debt funds and residential mortgage loans, within the purview of the environmental targets.

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The alliance established its new target-setting protocol earlier this year with the intention to govern the activities of asset owners over the next five years. Under the new protocol, organizations are now expected to target a reduction in greenhouse gas emissions of between 40 per cent and 60 per cent by 2030. Overall, the asset owners are still being held to a commitment of achieving net-zero greenhouse gas emissions by 2050 and aligning with 1.5 degrees Celsius pathways.

In a statement to Benefits Canada Kate Monfette, a spokesperson for the Caisse, said the shorter-term measurements implemented by the association offer necessary milestones on the path to achieving net-zero by 2050.

“It has been our experience that tools such as the target-setting protocol developed by the NZAOA are essential guidance for investors wishing to align their portfolios. They also send a strong signal to external managers and portfolio companies.”

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In a press release, the alliance said increased climate scrutiny of large and publicly traded companies may push some actors to sell brown assets — typically older buildings with less sustainability credentials — in the private sector, which it described as less transparent. “Only a harmonized approach to listed and non-listed ownership structures can mitigate this risk.”

Monfette noted the Caisse recently completed an exit from oil and coal production and is nearing its intermediary targets of having $54 billion in low-carbon assets by 2025, as well as a 60 per cent decrease in their portfolio’s carbon intensity compared to 2017.

The Caisse is a founding member of the association, which includes 89 global asset owners with $US9.5 trillion in assets under management. According to the association, US$8.4 trillion of those assets are currently under the target-setting framework. The University Pension Plan, the University of Toronto Asset Management Corp. and the Co-operators are also members of the alliance.

In 2023 Charles Emond, the Caisse’s chief executive officer, was re-elected to the alliance’s steering group.

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