Asset AllocationMarch 23, 2023

Ontario Pension to Invest Nearly $17 Billion in Green Investments by 2030

The strategy is part of Healthcare of Ontario’s plan to get its portfolio to net-zero greenhouse gas emissions by 2050.

Reported by Michael Katz

The Healthcare of Ontario Pension Plan announced it intends to make C$23 billion ($16.8 billion) in green investments by the end of the decade as part of its strategy to get its portfolio to net-zero of greenhouse gas emissions by 2050.

In its recently released climate plan, the C$103 billion Canadian pension fund said its strategy is to decrease the size of its portfolio’s carbon footprint through real-world emissions reductions.

“The plan recognizes that climate change poses both risks and opportunities, and that managing these as part of the investment process is essential to our fiduciary responsibility,” a HOOPP release stated.

As part of its short-term climate targets, the pension fund is aiming to have 80% of its assets provide reported emissions by 2025 to offer a more accurate measurement of progress. It also said it expects to exclude new direct investments in private thermal coal and oil exploration and production companies, and to initiate Scope three portfolio emissions measurement, in less than three years.

In addition to allocating C$23 billion in capital to green investments by 2030, the plan calls for reducing the portfolio’s carbon footprint by 32% compared with a 2021 baseline. It also said it expects that by 2030, at least half of its infrastructure and private equity portfolios will be covered by credible transition plans, and that it will have reduced its real estate portfolio’s emissions by 50% on an absolute basis through direct decarbonization efforts at its owned properties under its operational control.

“We will continually monitor, review and adjust our plan for changes in external factors, which can include regulatory changes,” HOOP declared in its report. “As we approach 2030, we will assess our progress against our 2030 targets as part of our preparation for the next five- and 10-year periods.” It added that its performance against the interim targets will determine how it is tracking toward its goal of reaching net zero by 2050.

As a founding member of Climate Engagement Canada, HOOPP said it is expected to disclose in line with the recommendations of the Task Force on Climate-related Financial Disclosures.

“Climate change is a global issue that requires collective action, including enhanced and standardized reporting of information by companies,” HOOPP CIO Michael Wissell said in a release.