Ontario Teachers Pension Plan sets target to reduce 45% carbon emission intensity in their portfolio by 2025

The Ontario Teachers Pension Plan Board announced on September 16  “industry-leading targets to reduce portfolio carbon emissions intensity by 45% by 2025 and two-thirds (67%) by 2030, compared to its 2019 baseline. These emission reduction targets cover all the Fund’s real assets, private natural resources, equity and corporate credit holdings across public and private markets, including external managers.”  The press release continues: “By significantly growing our portfolio of green investments and working collaboratively with our portfolio companies to transform their businesses, we can make a positive impact by encouraging an inclusive transition that benefits our people, communities and portfolio companies.”    Reaction by  pension advocacy group Shift Action acknowledges that this is  “the strongest climate commitment we’ve seen yet from a Canadian pension plan”, but called for OTPP to explain how it will eliminate its fossil fuel investments. The ShiftAction Backgrounder which accompanies the press release challenges the OTPP’s own estimate that approximately 3% of their assets ($6.6billion) are held in oil and gas assets, and compiles a list of company names and the extent of OTPP investments, including recent investments in 2020 and 2021.

If all of this sounds familiar, it may be because the Ontario Teachers Pension Plan released a Net Zero Emissions Commitment  in January 2021, which was criticized as greenwashing in  Breaking down Ontario Teachers’ 2050 net-zero emissions promise (The National Observer , Feb. 4). The article  stated: “…If OTPP is serious about adopting a globally significant climate-safe investment strategy, it needs a plan to exclude all new oil, gas and coal investments; a timeline for phasing out existing fossil fuel holdings; a commitment to decarbonize its portfolio by 2030; ambitious new targets for increasing investments in profitable climate solutions; and a requirement for owned companies to refrain from lobbying activities that undermine ambitious climate policy, set corporate timelines for reducing emissions, and link executive compensation to measurable climate goals.”  It seems OTPP is moving in the right direction, but ever so slowly – similar to the Canada Pension Plan Investment Board (CPPIB) and the Caisse de dépôt et placement du Québec (CDPQ), as explained in  An Insecure Future: Canada’s biggest public pensions are still banking on fossil fuels   released by the Corporate Mapping Project in mid-August .

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