As the world moves toward net zero, we aim to manage the investment risks and invest to capture and support value-creating opportunities that will arise as society works to remove greenhouse gas (GHG) emissions from the whole economy.
We believe that the performance of our portfolio will be influenced by how well it adapts alongside the global economy on the path to net zero. As such, we believe stewarding the portfolio to net zero is in the best interests of the contributors and beneficiaries of the Canada Pension Plan and meeting our mandate.
We are holding ourselves accountable to our net-zero commitment by taking the following actions. We will evolve and expand our plans over time.
- We will continue to invest and exert our influence in the whole economy transition as active investors, rather than through blanket divestment.
- We will achieve carbon neutrality for our internal operations by the end of FY23.1
- We expect our $67 billion investment in green and transition assets will increase to at least $130 billion by 2030.2
- We will build on our new decarbonization investment approach that seeks attractive returns from enabling emissions reduction and business transformation in high-emitting sectors.
Our commitment is made on the basis and with the expectation that the global community will continue to advance towards the goal of achieving net-zero GHG emissions by 2050. These advancements include the acceleration and fulfilment of commitments made by governments, technological progress, fulfilment of corporate targets, changes in consumer and corporate behaviours, and development of global reporting standards and carbon markets, all of which will be necessary to help enable us to meet our commitment. We are committed to staying ahead of developments that will impact our portfolio’s path to net zero.
Our Climate Change Principles help guide our decision-making so we can deliver our mandate against the backdrop of escalating climate risk and opportunities created by supporting the transition of the whole economy towards sustainability.
Navigating the risks and opportunities presented by the whole economy transition required by climate change will be a defining challenge of the 21st century. It will require courage and extraordinary skill on the part of policy makers, regulators, executives, boards, investors and individual citizens. As an investor, we join this effort not just as a capital provider but as a capital partner, one that brings experience and expertise as well as financial resources to the table.
We are committed to doing our part in the best interests of helping to keep the Canada Pension Plan secure and solvent for generations to come, and are delivering our statutory mandate.
1. Across Scope 1 and 2 GHG emissions and business travel emissions, which are Scope 3.
2. Figures as at December 31, 2021. We arrived at our definition of green and transition assets by considering different frameworks and taxonomies, including the E.U. Taxonomy. We consider an asset to be green when at least 95% of its revenue can be classified as being derived from green activities, as classified by the International Capital Markets Association. We consider an asset to be transition if it has announced its commitment to net zero with a credible target and plan and is making meaningful contributions to global emissions reduction.