Deborah Orida, Senior Managing Director & Global Head of Active Equities, Executive Sponsor of Climate Change Program
Why did CPP Investments refine its approach to climate change?
Climate change is one of the great disruptive forces of our time. It is a long-term theme that will persist through market cycles and impact all asset classes. Our long horizon, which requires us to think and invest over multiple decades, has crystalized climate change as an issue we need to understand and address, particularly from a financial point of view, which is critical to fostering and promoting stakeholder confidence.
How is the Climate Change Program different from what CPP Investments has done in the past?
The Program has a very direct impact on our investment processes. For example, since early 2019, all of our most material individual investments need to be analyzed through a climate change lens. Its framework enables teams to tailor the due diligence on climate to the size of potential risks – rather than creating a one-size-fits-all formula. We are currently planning to extend this work to existing portfolio companies. We’ve also bolstered our metrics to disclose our carbon footprint for both our public and private investments.
How does climate change impact day-to-day investment decisions?
Applying our Climate Change Framework has been a genuine learning experience for our investment teams and our organization. This is at the cutting edge of finance, and there is a lot to take in and reflect on. That is particularly true when you look at resiliency considerations in relation to facilities and assets, as well as how companies are positioned with respect to changing regulations and the costs associated with carbon pricing.