Climate Change and TCFD-Aligned Reporting
Achieving a Net-Zero Portfolio
OMERS is committed to achieving net-zero greenhouse gas emissions by 2050 and has set an interim goal of a 50% carbon intensity reduction by 2030. As part of our commitment we will set reduction goals every five years.
We believe that climate change and the expected transition to a lower-carbon economy will affect many industries and sectors, presenting long-term risks and opportunities for the financial returns of our investment portfolio. Risks include those driven by physical and transition climate factors. Opportunities will arise through new types of investments, industries and technologies generated as a result of this transition and adaptation to changing climatic conditions.
We have endorsed the Task Force on Climate-Related Financial Disclosures (TCFD) as we believe it is the most effective standard to deliver the information investors need to assess climate risk and report annually in line with the TCFD framework.
2021 | |
|---|---|
Carbon Footprint tCO2e/$M invested | 36 |
Weighted Average Carbon Intensity (WACI) tCO2e/$M revenue | 129 |
2020 | |
|---|---|
Carbon Footprint tCO2e/$M invested | 57 |
Weighted Average Carbon Intensity (WACI) tCO2e/$M revenue | 174 |
2019 | |
|---|---|
Carbon Footprint tCO2e/$M invested | 57 |
Weighted Average Carbon Intensity (WACI) tCO2e/$M revenue | 190 |
2021 | 2020 | 2019 | |
|---|---|---|---|
Carbon Footprint tCO2e/$M invested | 36 | 57 | 57 |
Weighted Average Carbon Intensity (WACI) tCO2e/$M revenue | 129 | 174 | 190 |
Addressing Climate Risk and Opportunity
It is our fiduciary duty to address climate-related financial risk and opportunities through our risk management, due diligence and asset management activities. To do so, we leverage the pillars of our Sustainable Investing approach: integration, collaboration, and engagement.
While the energy transition could significantly impact investments in the extraction and production of fossil fuels, the impacts could be much broader across many economic sectors and industries. Investments could face a number of climate-related risks and opportunities: advances in low-carbon technologies, intensifying climate-related policies, shifts in consumer preferences including reputational impacts, and the physical impacts of climate change. The potential impacts will range in varying degrees, across sectors, regions, timeframes, specific companies and assets.
Our Approach in Action
Integration
As fiduciaries, we will take appropriate actions to understand and, to the extent possible, mitigate and/or price climate-related financial risks, as well as capture new investment opportunities. Such opportunities may include assets transitioning towards or aiding in the transition towards net zero. We incorporate climate change considerations into our investment guidance and decision-making and evaluate on a case-by-case basis where financial exposure to climate-related risks could be material.
Collaboration
Climate change impacts are both asset-specific and collective in nature, OMERS will continue to collaborate with other institutional investors, governments, regulators and other parties with a view to further understand climate change implications for markets and economies in which we invest.
Engagement
We believe that engaging with our investee companies where climate change presents material risks, and striving to improve overall reporting and transparency, will enhance our understanding of the financial risks posed by climate change on our portfolio.
In 2021, we joined the Climate Engagement Canada (CEC) initiative, which is an investor-led collaborative engagement program designed to educate company boards and senior leaders of Canadian companies on the concerns and expectations of the financial sector as they relate to a timely transition to net-zero emissions by 2050. As a participant, OMERS will engage in collaborative dialogue with Canadian public companies on their transition to net zero by 2050.