Charting a path to net zero

Ontario Teachers’ Pension board details new emissions targets,

The Ontario Teachers’ Pension Plan board has set new targets to accompany its plan to tackle climate change and curb greenhouse gas emissions tied to its multibillion-dollar portfolio.

Canada’s largest single-profession pension plan said Thursday it aims to slash the carbon emissions intensity of its investments by 45 per cent by 2025 and by two-thirds by 2030, compared against its 2019 baseline.

The targets come after the $227.7-billion fund announced in January a commitment to achieve net-zero greenhouse gas emissions by 2050. The pledge reflects the mounting pressure on major institutional investors to bankroll clean energy and divest assets that contribute to climate change.

The Canadian Pension Plan Investment Board came under scrutiny for its stake in two private prison operators that ran migrant detention camps along the U.S.-Mexico border. The CPPIB eventually sold its shares in 2019.

In January, an environmental coalition appealed to Ontario teachers to pressure their pension fund to divest from companies that develop or transport fossil fuel products. Weeks later, the OTPP announced its commitment to achieving netzero greenhouse gas emissions.

While the commitment stops short of outright fossil fuel divestment, it focuses on investing in green companies and encouraging its portfolio companies to decarbonize.

Ziad Hindo, Teachers’ chief investment officer, said the fund’s targets are industry leading and could encourage other large funds to invest in environmentally friendly assets.

Shift Action for Pension Wealth and Planet Health, part of the environmental coalition that appealed to Ontario teachers earlier this year, welcomed the new targets but said the pension plan needs to go further if it wants to be a global leader on climate.

“While this announcement describes how the OTPP will invest in solutions to the climate crisis, it makes no mention of how it will eliminate its exposure to the primary cause of it — namely high-risk fossil fuels,” the advocacy group said in a statement.