Ontario Teachers’ have taken their decade-long support for the environment a step further.
Their Pension Plan Board has put 2025 and 2030 targets in place to reduce greenhouse gas emissions. The goal? To achieve net-zero investment activity by 2050.
Here are some of the ways they plan on getting there:
- Increase investments in clean energy companies that reduce demand for fossil fuels and build a sustainable economy.
- Pivoting towards green investment asset classes
- Investing in transition assets to secure reductions in carbon emissions
- Set their portfolio companies on a clear path to implement net-zero plans & reduce emissions
- Issuing green bonds & invest proceeds into climate solutions and sustainable companies
- Set clear climate policies and partner with other industry leaders to effect global change
- Reporting annually on progress against 2025, 2030, and 2050 targets.
President and CEO Jo Taylor said, “As an active, global investor, we play a critical role in helping accelerate the transition to a net-zero economy. Given the scale and complexity of our investment portfolio, we believe this is an ambitious plan that will meaningfully lower emissions and contribute to the plan’s long-term sustainability.”
As of June, Ontario Teachers’ portfolio included more than C$30B in green investments, such as renewable energy, energy storage, electrification, electricity transmission, energy efficiency, and green real estate. They also have C$5B allocated towards climate and transition solutions.
To think that even more funds will be invested in ESG initiatives is a reason for Canadians and the world to celebrate. Maybe other pension plans in Canada and the United States will follow the Ontario Teachers’ lead. If they do, the world may reach its Paris Agreement targets and begin to see the environment improve.
Ontario Teachers’ currently have C$227.7 billion in net assets (as of June), with 80% managed in-house. The annual total fund net return has been 9.6% since the plan started in 1990.
“Climate change permeates the entire investing landscape. Tackling it requires substantial effort and massive amounts of capital,” said Ziad Hindo, Chief Investment Officer. “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.”
Opportunities and interest in environmental programs are rising, with global carbon markets expected to hit $22T by 2050. If more pension plans choose to set the same ambitious goals, the world will see real progress.
Ontario Teachers’ have not only set an example for their students about supporting causes you care about, but for the world at large.