Ontario Teachers' Pension Plan, Toronto, released its first-ever Climate Change Report, which outlines its practices and policies for managing investment risks and opportunities related to climate change.
The report summarizes how the C$191.1 billion ($140.1 billion) pension plan integrates climate factors in its investment decisions, engages with companies and partners to encourage environmentally friendly activity, and influences policymakers and regulators to promote stable long-term environmental policies.
The report also highlights how Ontario Teachers' board and senior management oversee climate-related risks and opportunities and analyze the potential effects of climate change at the individual investments.
"Climate change is one of the biggest and most daunting challenges facing the world," said Barbara Zvan, chief risk and strategy officer at Ontario Teachers' in a news release announcing the report. "There are risks to traditional economic and business models associated with the transition to a low-carbon economy, the chronic and acute risks of a warming climate, and the interaction between these forces."
Added Ms. Zvan: "Actively managing the related opportunities and risks is central to the Plan's investment strategy and will be a critical factor to our future success."
The pension plan revealed that it is also looking to develop tools that can project future impacts of climate change. The report cites Ontario Teachers' plan to transition to a low-carbon economy it unveiled in 2016 as an example of one such tool.
Ontario Teachers' is also seeing prime investment opportunities such sectors and industries as energy storage, energy efficiency projects, renewable power, industrial/commercial redesign and retrofit projects, and the electrification of transportation.
Its greenfield and renewables team invests in areas such as battery storage, microgrids and smart meters, while its real estate arm, Cadillac Fairview, focuses on investment opportunities within energy and emissions efficiency.
"In the short term, predominant risks will likely come from policy changes aimed at reducing carbon emissions, litigation related to perceived failures on the part of companies to disclose or manage climate risks, physical risks from extreme weather events and changing consumer behavior," the report said.
