Statement on IMCO's 2021 ESG Report
Statement from Shift Action for Pension Wealth & Planet Health on the Investment Management Corporation of Ontario’s (IMCO) 2021 Environment, Social and Governance (ESG) Report
For Immediate Release: June 29, 2022
Toronto, ON - With the launch of its inaugural Environment, Social and Governance (ESG) report, the Investment Management Corporation of Ontario (IMCO) is taking the first steps towards building a credible climate plan. It has committed to net-zero emissions across its portfolio by 2050 or sooner, but still needs to set interim targets to reduce the emissions of its portfolio and scale up investments in climate solutions. IMCO has indicated that both kinds of targets are coming in 2022.
IMCO has not placed a screen on new fossil fuel investments nor has it announced any plan to phase out existing fossil fuel investments. It also has failed to set the expectation that its portfolio companies may not lobby against climate action. These missing pieces are essential for a credible climate-aligned plan.
We are pleased that IMCO is a signatory to the rigorous Paris Aligned Investment Initiative (PAII), a voluntary investor-led initiative that provides clear and credible guidance for achieving climate goals. To date, IMCO is the only Canadian signatory. Through PAII, IMCO is committed to achieving real economy emissions reductions while implementing its path to net-zero; setting emissions reduction targets for Scope 1, 2 and 3 emissions; and publishing a clear Investor Climate Action Plan for achieving these goals.
We are also pleased to see IMCO making a link between its responsible investment objectives and its executive compensation, although the details are not yet clear.
IMCO’s proxy voting guidelines (developed in 2021) contain stronger sections on climate than is typical of other Canadian pension fund managers. Proxy guidelines generally indicate a fund will “encourage” climate-risk disclosure and “appropriate” handling of climate-related financial risk, but these are weak and poorly defined expectations. We are pleased to see IMCO’s proxy voting guidelines clearly state the expectation that held companies “commit to net-zero carbon emissions by 2050 or sooner, set science-based emission reduction targets, and disclose climate information in line with Task Force on Climate-Related Financial Disclosures (TCFD).” A net-zero, science based target must be included in order for IMCO to support a management-sponsored climate proposal. IMCO’s handling of proxy votes is also noteworthy for its disclosure: IMCO posts its planned votes and voting rationale on its website in a searchable database.
IMCO has committed to releasing interim targets in 2022 for reducing greenhouse gas emissions across its portfolio and for increasing its investments in climate solutions. Shift looks forward to the announcement of ambitious, transparent, and science-based targets and credible interim plans for achieving them soon.
Background information on IMCO
IMCO is the manager of Ontario’s $33.8 billion Public Service Pension Plan (PSPP), the pension fund for over 93,000 active and retired Ontario public servants. IMCO has $79 billion in assets under management, including the PSPP, the Provincial Judges’ Pension Board, and the insurance and benefit funds of the Workplace Safety and Insurance Board.
Contact information:
Adam Scott, Director, Shift Action for Pension Wealth & Planet Health
adamscott@shiftaction.ca
416-347-3858
Shift Action for Pension Wealth and Planet Health is a charitable initiative that works to protect pensions and the climate by bringing together beneficiaries and their pension funds to engage on the climate crisis.