The OPSEU Pension Trust is enhancing its climate change strategy to successfully navigate the global transition toward net-zero emissions.
The pension fund’s priorities include updating climate scenarios and examining any implications for its investment approach; launching climate due diligence frameworks for use by investment teams across all asset classes; implementing stewardship plans to advance the transition of its high-risk assets; collecting baseline data on climate metrics for its portfolio and establishing a framework to set appropriate and relevant targets; and continuing to join global peers in advocating for progress on climate policies.
Read: How the OPTrust is taking a sustainable approach to investment
According to a press release, the OPTrust’s climate change strategy is built around four pillars that embed climate considerations across its portfolio — investment strategy and selection, asset management, portfolio analytics and advocacy and disclosure. It’s aiming to achieve a net-zero portfolio by 2050.
“As the world grapples with the growing challenge of climate change, investing sustainably for the long-term health of our pension plan demands addressing climate sustainability,” said Peter Lindley, president and chief executive officer at the OPTrust, in the release. “Our climate change strategy commits to a net-zero portfolio by 2050 and to building the foundation that enables us to embed climate considerations into the way we invest — a commitment we make to our members’ pension security.
In other news, the administrator of New Brunswick’s jointly sponsored Crown corporation pension plans is providing details of its responsible investing strategy in a new report covering its activities in 2021.
Read: Net-zero transition offering opportunities for Canadian pension sector: report
“Our responsible investing guidelines are utilized as part of our active investment approach and are expected to provide better risk-adjusted investment returns than through a more passive management approach,” said John Sinclair, president and chief executive officer of Vestcor Inc., in the report. “It also ensures that the companies we invest in have the proper robust governance policies, diverse management teams and risk management procedures in place to identify and manage the risks inherent in their businesses.”
The report highlights a number of examples of investments demonstrating Vestor’s pursuit of renewable energy infrastructure opportunities, including Terra-Gen, a company that develops, constructs, owns and operates utility-scale wind, solar and battery storage projects throughout the U.S., in which it secured a 50 per cent stake in 2021. “The company currently operates more than 1,800 megawatts of facilities and has over 3,000 megawatts in its development portfolio. The underlying nature of Terra-Gen’s assets strongly supports [Vestcor’s environmental, social and governance] goals and, in particular, the push towards de-carbonizing energy sources.”
Vestcor also disclosed the greenhouse gas emissions for its consolidated core public securities investment portfolio. The disclosure, which is based on guidelines from the task force on climate-related financial disclosures, found Vestcor financed 628,374 tons (570,051 tonnes) of carbon emissions in 2021, equivalent to about 204.5 tons (185.5 tonnes) for each US$1 million it invested.
Read: N.B. auditor general report calls for transparency from public sector investment organization