Climate Change

A renewed urgency

Scientists are unequivocal that the human-caused climate change has and will continue to impact societies world-wide, affecting our collective well-being and in turn, the global financial system and every industry in which OPTrust invests.

The call to action to the global community, including investment organizations such as OPTrust, is clear: we all must work to transition to net zero before 2050, recognizing that the course of action taken between now and 2030 will determine whether the global community can still facilitate this transition to net zero in an orderly way.

This places new imperatives on all of us, as fiduciaries, to identify the risks and opportunities in our portfolios, to be transparent with our stakeholders and members about our efforts to manage climate risks and our own environmental impact and, where possible, to actively contribute to solutions.

OPTrust's approach

In 2021, OPTrust struck a cross-organizational committee called the Climate Response Working Group (CRWG) to lay the groundwork for the renewal of our 2018 Climate Change Action Plan and implement key areas of work under the new strategy. This committee’s work, which received OPTrust’s Annual CEO Award for excellence in December 2021, has advanced a number of workstreams, including:

Completing a top-down scenario analysis on the impact of climate change on macro-economic factors, asset class returns and our funded status

Undertaking bottom-up evaluations of climate risk in each of our asset classes to identify areas of and develop management plans for assets or strategies with the highest climate risk

Developing an improved approach to our Taskforce for Climate-related Financial Disclosures (TCFD)

Building on our 2020 carbon footprinting exercise by identifying ways to better access climate data, including in our privately held investments

Better integrating climate considerations into risk management frameworks and reporting

Researching the policy landscape and best-practice peer approaches and conducting education and strategy sessions to advance discussions on climate change across the organization.

The CRWG’s advancements build on OPTrust’s long-standing commitment to integrating climate considerations into our investment and engagement strategies. This includes:

Membership in numerous current and past investor collaborations, including the UNPRI, the 2021 Global Investor Statement to Governments on the Climate Crisis, Ceres, CDP, Climate Action 100+, ILN’s climate advisory committee, and Thinking Ahead Institute’s Investing for Tomorrow Climate Working Group, among others

Proxy policies and engagement partnership that support greater management of climate risk and opportunity in our capital markets portfolios

Existing investment strategies, such as our renewable energy portfolio (2007 onward), green buildings (over a decade of green building certifications), green bonds (2018 onward), low-carbon index strategy (2020 onwards) and our sustainability incubation strategy (2021 onward)

Foundational research, including our 2018 asset-liability pilot project with Ortec Finance and a 2017 climate risk assessment

Long-standing commitments to Responsible Investing disclosures and reporting