Statement on OPTrust’s Climate Change Strategy and 2050 Net-Zero Commitment
Statement from Shift on OPTrust’s Climate Change Strategy and 2050 Net-Zero Commitment
SHIFT ACTION FOR PENSION WEALTH & PLANET HEALTH
For Immediate Release: October 25, 2022
Statement from Adam Scott of Shift Action for Pension Wealth and Planet Health on OPTrust’s Climate Change Strategy and 2050 Net-Zero Commitment
Toronto, ON | Traditional territories of the Huron-Wendat, the Anishnaabeg, Haudenosaunee, Chippewas and the Mississaugas of the Credit First Nation - Shift welcomes OPTrust’s commitment to net-zero emissions by 2050 and the pension fund’s recognition of the urgency of the climate crisis, which OPTrust calls “an immediate threat to (its) portfolio that (it) cannot afford to ignore” (p.2). Unfortunately, OPTrust’s updated Climate Change Strategy does not yet reflect this urgency in ambition, detail or action.
With today’s announcement, OPTrust becomes the eighth Canadian pension fund to make a long-term net-zero emissions commitment– the first step in aligning its portfolio with climate safety. OPTrust’s release of a climate scenario analysis also indicates the pension fund’s commitment to transparency and the need to understand the impact of different global heating scenarios on its members’ retirement security.
However, OPTrust’s Climate Change Strategy continues to fall well short of a credible climate plan.
OPTrust has fallen behind leading Canadian pension funds, which have calculated their portfolio carbon footprints and set ambitious interim targets to reduce emissions intensity, stated clear goals and expectations for engaging and stewarding emissions-intensive companies in their portfolios, and signed onto credible international Paris-aligned investor bodies such as the Net Zero Asset Owners Alliance or the Paris-Aligned Investment Initiative. Unlike its peers, OPTrust does not proactively make public its proxy votes on shareholder resolutions, despite its Climate Change Strategy’s commitment to “enhance internal and external climate reporting” and “maintain and enhance corporate engagement and proxy programs” (p.8).
While it acknowledges that “addressing plan sustainability requires addressing climate sustainability” (p.5), OPTrust fails to say how its own investment decisions have the potential to lock in fossil fuel use and make the climate crisis worse. For example, OPTrust is financing the construction of a new fossil gas plant in Edson, Alberta that’s scheduled to begin operation next year, even though climate safety requires a rapid transition away from fossil fuels and OPTrust’s own climate scenario analysis says that oil and gas production approaches zero by the 2040s in a Paris-aligned scenario (p.10).
We acknowledge OPTrust’s efforts to continually enhance its approach to managing climate risk and look forward to a comprehensive OPTrust climate strategy with clear decarbonization targets and a plan for the managed phase-out of its fossil fuel assets.
Background Information on OPTrust’s Fossil Fuel Investments
OPTrust has low exposure to fossil fuels in its public equity portfolio, holding less than $39 million in the shares of fossil fuel companies as of June 30, 2022.
OPTrust joined a consortium of investors in August 2020 to provide $1.5 billion in financing to Kineticor to build a 900-MW gas-fired power plant in Edson, Alberta. Two OPTrust Portfolio Managers sit on Kineticor’s board.
OPTrust is a private co-owner of Zenith Energy, an off-grid power generation and energy services company in Australia with a portfolio of two diesel, four gas and four hybrid gas/diesel generation projects as well as combined solar/diesel and solar/gas projects.
OPTrust is a private co-owner of Superior Pipeline Company, a midstream services company with growing operations in fossil gas gathering, compression, processing, treating, dehydration and marketing in Texas, Oklahoma, Kansas, Pennsylvania and West Virginia. Two OPTrust senior staff sit on Superior’s board.
Contact information for interview requests:
Adam Scott, Executive Director, Shift Action for Pension Wealth & Planet Health
adamscott@shiftaction.ca
416-347-3858
Patrick DeRochie, Senior Manager, Shift Action for Pension Wealth & Planet Health
patrick@shiftaction.ca
416-576-2701
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.