September 24, 2018
Ontario Teachers' Pension Plan (Ontario Teachers') is pleased to recognize Climate Week. Held annually, Climate Week is a forum run by The Climate Group in coordination with the United Nations and City of New York, where the world gathers to highlight action on climate change and to discuss ways to do more.
"Climate change will impact our members' futures," said Ron Mock, President and Chief Executive Officer. "Actively managing the related risks and opportunities is core to our investment strategy as stewards of long-term capital."
Focusing on sustainability
We integrate climate change considerations across the entire investment cycle, from the decision to buy an asset to how we manage it once we own it. Our responsible investing approach has also led us to seek investments that offer good long-term growth fundamentals because of climate change considerations. This includes investments in renewable generation, micro grids, smart meters, aquaculture and energy storage.
"Many investors see climate change as a constraint," said Barbara Zvan, Chief Risk and Strategy Officer. "At Ontario Teachers', we believe that considering climate change and applying a responsible investing lens can actually give us an edge in capturing value and mitigating downside risk."
Partnering to support meaningful change
We believe that encouraging and helping companies adopt responsible, forward-looking business practices can drive long-term value. Since 2015, we have conducted more than 60 engagements with companies to discuss their strategy and approach to managing climate change risks, primarily focused on the oil and gas, extractive and utility sectors.
We also collaborate with like-minded peers and industry associations to promote better policy, regulations, and practices for managing climate risks. We are currently working with a group of institutional investors to advance three global initiatives addressing climate change, gender equality and the global infrastructure gap.
We also participate in collaborative engagements for improved corporate sustainability with a number of organizations, including the Sustainability Accounting Standards Board (SASB) and Climate Action 100+. Our Chief Risk and Strategy Officer Barbara Zvan is one of four people on the Government of Canada's Expert Panel on Sustainable Finance.
Measuring and evolving our strategy
To measure our efforts, we look to industry standards. As a signatory to the Principles for Responsible Investment, the world's leading proponent of responsible investment, our efforts are assessed annually. We received an A+ ranking for our overarching strategy and governance approach. The Asset Owners Disclosure Project recently released their 2018 rankings for 100 global pension funds, and we were pleased to see our performance improve from C in 2017 to BBB this year.
As of December 31, 2017, we introduced a carbon footprint of our global public equities portfolio. This is our first step in assessing the Plan's climate change risk exposure. It is also a tool to help us identify corporate engagement targets.
Ontario Teachers' is committed to continually learning and evolving our practices. Our Responsible Investing team and internal Climate Change Working Group continue to be a big part of these efforts.
Read our 2017 Responsible Investing Report to learn more about our climate action work and other initiatives.
We welcome comments and suggestions on all of our responsible investing activities at Responsible_Investing@otpp.com.