Ontario Teachers' Pension Plan, Toronto, and Wellington Management Co. LLP are collaborating with Woods Hole Research Center to dig deeper into climate change research that can be applied to the C$207.4 billion ($150.5 billion) pension fund's investment strategies.
Wellington, an investment adviser with more than $1 trillion in assets under management, and OTPP are working with Woods Hole, the Cape Cod, Mass.-based think tank that is a leader in climate science research.
"Our investments, particularly those in real assets, require careful consideration of the physical risks posed by climate change. With access to top-quality climate science data, we can build on our own expertise in this area and use the research provided to develop deeper insights," said Ziad Hindo, OTPP chief investment officer, in a joint statement.
The work will aim to bridge the gap between finance and climate science and help OTPP navigate risks and opportunities, said Wendy Cromwell, vice chairwoman and director of sustainable investment at Wellington. Unfolding physical climate risks "will impact companies, economies and society," Ms. Cromwell said.
Chris Goolgasian, Wellington's director of climate research, said a key aspect is making the research applicable to individual securities in all asset classes, and within their respective relevant time horizons, not the distant future. A crucial climate risk factor is an asset's location, which Wellington is now mapping for numerous asset types and to fit OTPP's requests. "We map those locations and show a specific climate variable's risks. Then we work to determine to what degree these risks are priced into security valuations," Mr. Goolgasian said.
The partnership is a powerful step, said Philip B. Duffy, Woods Hole executive director, in the statement. "If humanity is to meet the grand challenge of climate change, all sectors of society will need to participate," Mr. Duffy said.