One of Canada’s Largest Pensions Vows Net Zero Emissions by 2050

(Bloomberg) -- The Ontario Teachers’ Pension Plan committed to reaching net-zero emissions across its investment portfolio within three decades.

Ontario Teachers’ will increase investments in climate-friendly projects, ensure companies in its portfolio manage and report their emissions every year and work with them to reach carbon neutrality by 2050, said its chief investment officer. The fund manages C$205 billion ($161 billion) of retirement savings for educators in Canada’s most populous province.

“This entails a sustained effort from our end, first in growing our investments in smart climate and energy solutions,” CIO Ziad Hindo said in an interview. “We have already been expanding our capabilities to identify, evaluate more and more opportunities on the green side.”

The pledge comes about two months after the heads of eight leading Canadian pension plan managers called on companies and investors to provide “consistent and complete” environmental, social and governance information to strengthen investment-decision making. The group, which included Ontario Teachers’, collectively manages C$1.6 trillion in assets.

The Teachers’ fund also plans to issue more green bonds, using the proceeds for climate opportunities. The Toronto-based fund manager issued its first green bond last year, which Hindo said was “very well-received” by market participants.

“It was a signal that the market is really trusting our commitment to deploy more and more capital into greener assets,” he said. “You’re going to see more and more investors willing to participate in investing in green bonds, because it is aligned with their responsible investing practices.”

Commitment Credibility

Advocacy group Shift Action for Pension Wealth & Planet Health said that while it was “pleased” with Ontario Teachers’ “critical first step” on dealing with climate-change risks, a commitment to net-zero emissions has little credibility on its own without concrete steps to achieve the goal.

“Without a plan for major changes to the way the pension fund makes investment decisions, a net-zero commitment runs the risk of becoming a cynical example of greenwashing,” the group said in a statement.

Ontario Teachers’ will release concrete targets and potentially five and 10-year plans in the coming months to help get to net zero emissions by its deadline, Hindo said.

“This is a journey, it has a lot of complexity, but we are absolutely committed to playing our part in helping the world transition,” he said.