Comment on HOOPP's 2021 Real Estate Sustainability Report

Comment from Shift Action for Pension Wealth and Planet Health on Healthcare of Ontario Pension Plan’s 2021 Real Estate Sustainability Report

Re: Healthcare of Ontario Pension Plan’s 2021 Real Estate Sustainability Report

Shift welcomes the Healthcare of Ontario Pension Plan’s (HOOPP) restated commitment to reduce the Scope 1 and 2 emissions of its real estate assets by 50% by 2030, below a 2019 baseline. In the midst of a worsening climate crisis, the progress and targets in HOOPP’s $20 billion real estate portfolio must be broadened into a net-zero climate strategy covering HOOPP’s entire $114 billion portfolio.

While the real estate carbon reduction goal does not take into account scope 3 emissions, and covers the emissions from only those buildings over which HOOPP has operational control, the target is a significant mid-term commitment on the path to net-zero across the fund’s entire portfolio. It’s a clear demonstration of progress to see HOOPP set an absolute emissions target instead of the emissions intensity targets typical of Canadian pension funds and their real estate subsidiaries. 

However, HOOPP’s scorecard shows stalled progress across nearly all of its real estate sustainability indicators between 2020 and 2021, with only a modest improvement in the greenhouse gas (GHG) intensity metric. HOOPP’s stakeholders, including beneficiaries concerned about HOOPP’s ability to navigate the zero carbon transition, will need to see annual progress and a credible decarbonization pathway in order to share HOOPP’s confidence that it can reach its target.

The fund states that, along with its property managers, it has confidence that its $20 billion real estate portfolio can meet the 2030 target of halving absolute emissions in part due to data from its custom emissions planning tool. However, the emissions planning tool relies on the decarbonization of electrical grids in jurisdictions where HOOPP owns real estate assets (while HOOPP itself continues to hold hundreds of millions in fossil fuel producers and utilities). Further, HOOPP provides no information on how it plans to address the emissions created by the portfolio’s immense heating needs. References to energy-efficiency projects, solar installation, and the purchase of renewable energy credits are important, but they do not collectively provide a transparent or credible pathway to achieve zero emissions across HOOPP’s real estate portfolio.

While HOOPP puts its faith in grid decarbonization, the fund needs to acknowledge that it is not a passive bystander when it comes to how power is generated. Shift’s analysis of HOOPP’s United States Securities and Exchange Commission filings to March 31, 2022 shows HOOPP holding at least $1.3 billion in its public equity portfolio in the shares of fossil fuel companies and infrastructure, including coal- and gas-fired power plants.

If HOOPP outlines how it will address carbon pollution from heating, demonstrates absolute emissions reductions in its real estate scorecard reports, and aligns investing across its portfolio with a strategy for grid decarbonization, then HOOPP’s real estate assets can be a beacon on the way to a climate-safe future.