Targeting Net Zero: Doing our part to facilitate the transition

Recognition that we all need to do more to urgently address the climate crisis is gathering speed. Governments, major investors and businesses are taking note. In 2021, we aligned ourselves with the Paris Agreement and committed to achieve net-zero greenhouse-gas emissions by 2050. With this pledge, we joined the collective effort to secure a more sustainable future.

But we’ve also gone several steps further, outlining ambitious interim emissions-intensity reduction targets that put us ahead of our industry peers and underscore our commitment to taking immediate action on climate. First, we’re aiming to reduce the carbon intensity of our portfolio by almost half in less than five years. We’re targeting an even deeper reduction of two-thirds of our emissions intensity by the end of this decade. Our interim targets cover most of our investment portfolio, and cover the real estate, natural resources and infrastructure assets we operate and the public and private companies whose shares we own.

What do we mean by emissions intensity? Simply put, it’s how much we have in emissions for each dollar we’ve invested. We’ve chosen this metric over an absolute emissions-reduction target because Ontario Teachers’ has a bold plan to grow in the coming years, to $300 billion in assets by 2030 from around $228 billion currently. Focusing on intensity will compel us to seek out more climate-friendly investments and to work with the companies we own to reduce emissions—all as we grow. In practice, that will mean investing in companies that produce clean energy, using the proceeds from our green bonds to invest in sustainable assets, supporting the transition plans of high emitters, and much more.

We’ve demonstrated that we want to be an active part of the net-zero transition, and we believe our interim targets highlight the scope and magnitude of our ambition. But we believe accountability is critical, too—in keeping us laser-focused on our transition efforts. We follow leading practices around carbon accounting and reporting, and we’ll be working with our portfolio companies on how they manage their reporting.

When it comes to tackling climate issues, we’re pursuing a strategy that’s ambitious and clear. It’s part of our plan to deliver retirement security to our members while helping to shape a better world.