When it comes to Canadian pensions, there’s a new climate leader in town

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A pension fund for four Ontario universities is promising to achieve net-zero emissions across its portfolio by 2040, catapulting it into a climate leadership position.

The University Pension Plan Ontario (UPP) is an $11.8 billion fund for more than 37,000 members working at the University of Toronto, University of Guelph, Trent University and Queen’s University . Its net zero goal puts it 10 years ahead of peers like the Ontario Teachers’ Pension Plan and the Caisse de depot et placement du Quebec. To help guide emissions reductions, the pension fund is also setting interim targets for 2025 and 2030, representing a 16.5% and 60% reduction in emissions compared to 2021.

The UPP’s emissions reduction targets come after 100 professors wrote to the pension plan in November urging it to adopt a cutting-edge strategy. The University of Toronto and the University of Guelph have announced their intention to divest from fossil fuels. In 2020, the U of Guelph pledged to phase out its fossil fuel investments over five years, while in October the U of T said it would divest from direct fossil fuel investments within 12 months and would divest of its indirect investments by 2030.

“It is clear that the UPP is listening, learning and acting on the concerns of its members, including those who are experts in climate science, sustainable finance and climate and energy policy,” said advocacy group Shift. Action for Pension Wealth and Planet Health. in a report.

Along with its emissions reduction targets, the UPP’s annual report released on Thursday sets out its goal of building a pension fund that can “stand up to any environment”. He specifically pointed to an investment exclusion policy that excludes any investment in thermal coal, and an action plan to reduce its emissions that comes with an explicit acknowledgment that the fund’s investments affect the environment and that the environment will in turn affect the safety of these investments. .

“This climate action plan responds to two deeply related goals,” UPP President Barbara Zvan said in a statement. “The first is to develop a strong and resilient fund that guarantees our members’ pension benefits now and in the future. The second is to invest in a stable and healthy world in which our members can retire.

In a statement, Sean Cleary, who chairs the Institute for Sustainable Finance at Queen’s University, called the pledges impressive and applauded the fund for providing a plan to align its investments with members so that the fund pension can be held responsible.

He also called the targets “ambitious in setting a net zero target for 2040 and pragmatic in recognizing that the real impact lies in reducing emissions, not just in the fund’s portfolio, but in the real world.”

“It demonstrates both strategy and substance – setting milestones and establishing focused engagement efforts.”

Beyond thermal coal, the pension also excludes investments in tobacco, certain types of weapons like landmines, chemical weapons or cluster munitions, and all “entities” based in Russia.

A pension scheme representing members of @UofT, @uofg, @TrentUniversity and @queensu has set a goal of net zero emissions in its portfolio by 2040, catapulting it ahead of its peers.

While generally supporting the UPP’s plan, Shift Action says there is room for improvement.

“Given that the UPP recognizes the environmental, economic, financial and social imperative to mitigate climate change, it is unclear why the UPP would treat oil and gas companies any differently than it treats the thermal coal industry. , which she specifically excluded,” he said in a statement.

“The UPP has yet to demonstrate how it fully protects its members from the growing financial risks associated with maintaining investments in the oil and gas companies that are fueling the climate crisis and which to date have proven recalcitrant to the public. engagement effort.”

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