OMERS commits to Net Zero 2050 emissions goal, building on its Sustainable Investing program
Follows previously announced goal to reduce carbon intensity of total portfolio by 20% by 2025
Interim goals will be set every five years
November 24, 2021 (Toronto; Canada) -- OMERS continues to advance its Sustainable Investing efforts by announcing today its commitment to achieve net-zero greenhouse gas emissions across its total portfolio by 2050.
Climate change is one of the most pressing issues of our time. As a responsible asset owner and manager, OMERS has a program in place to sustainably grow its assets over the long term.
Blake Hutcheson, Chief Executive Officer and President, OMERS commented: “Our near-term carbon reduction goals are tangible, actionable, and ensure our leadership team is accountable today. With our Net Zero 2050 goal, we believe we are charting the right course for our future. We are also confident that we can do this by working with governments and other conscientious Canadian and global businesses in the months and years ahead.”
As at June 30, 2021, OMERS had $114 billion in net assets globally, across public and private markets, and has the potential to make a significant contribution in the transition to a low-carbon economy. Efforts across asset classes are well underway to allow OMERS to achieve its near- and longer-term carbon reduction goals. OMERS currently holds more than $18 billion in green assets, based on the International Capital Market Association (ICMA) Green Bond Principles, including those engaged in renewable energy, energy efficiency and green-certified buildings.
Satish Rai, Chief Investment Officer, OMERS, commented: “As investors, we play an important role in working with our portfolio companies and making capital allocation decisions during the transition to a lower carbon economy. We believe that integrating ESG factors into our investment approach is a more holistic way of assessing both value drivers and risk to deliver long-term, stable returns to our members.”
OMERS has already pledged to reduce the carbon intensity of its total portfolio by 20% by 2025, in line with the Paris Agreement. Five-year successive interim reduction goals will follow in support of our longer-term commitment.
The path to Net-Zero will be informed by the annual calculation and public disclosure of OMERS total portfolio carbon footprint, in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Carbon footprinting allows OMERS to more deeply understand the Plan’s climate-related risks and opportunities, both immediately and in the future.
Manager, Media Relations
Founded in 1962, OMERS is a jointly sponsored, defined benefit pension plan, with 1,000 participating employers ranging from large cities to local agencies, and over half a million active, deferred and retired members. Our members include union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services and children’s aid societies across Ontario. OMERS teams work in Toronto, London, New York, Amsterdam, Luxembourg, Singapore, Sydney and other major cities across North America and Europe – serving members and employers and originating and managing a diversified portfolio of high-quality investments in public markets, private equity, infrastructure and real estate. OMERS had net assets of $114 billion as at June 30, 2021.
Our Net Zero Announcement – A Letter from Blake Hutcheson
Today is an exciting day across the OMERS enterprise, as we publicly announce our goal of reaching net zero greenhouse gas emissions for our total portfolio by 2050. This builds upon our previously-announced commitment to reduce the carbon intensity of our portfolio by 20% by 2025, with five-year successive interim goals to follow.
Setting this long-term goal is a major step for us. And we believe it is the right thing to do for our members, our employees, our partners, our customers – and for society at large. It is imperative to our sustainability and success that we have a clear approach to climate change and broader ESG issues. I am proud, and I hope you are, that we have set this climate science-aligned target as we continue to deliver sustainable, affordable, and meaningful pensions to our 525,000 members.
Our net-zero goal may be new, but our focus on sustainable investing is not. For years, our investment teams have been securing assets that are well positioned for the long term, including in the ongoing energy transition space.
The Canadian economy has a strong basis in natural resources, and as such will have unique challenges and opportunities related to the low-carbon transition, requiring us all to work together. We are confident we can do this by working with governments and other conscientious businesses. OMERS is a global investor with a diversified portfolio, including billions of dollars invested in Canada. We intend to continue to invest in new low-carbon opportunities and well-managed companies with thoughtful transition programs in Canada and around the world. Our sustainable investing approach involves partnering with portfolio companies that are advancing their ESG practices, voting our proxies, and working with like-minded investors; all with the belief that engaging and using our voice to influence positive change is a preferable approach to divestment.
While the pressure may seem greater than ever as competitors jostle for profitable and climate-friendly investments, we will stay on strategy and maintain our focus. This means continuing to selectively identify and build the right combination of diversified, high-quality global holdings. Our approach to sustainable investing, and embedding ESG factors into our investment decision-making, is not a trade-off to returns. Rather, we believe it enhances our underwriting and asset management practices. OMERS currently holds more than $18 billion in green assets based on the International Capital Market Association (ICMA) Green Bond Principles. To date, some of our green investments include: Leeward Energy, a U.S.-based renewable energy company; Azure Power, a high-growth renewable power provider in India; FRV, a solar owner and developer in Australia; Northvolt, a low-carbon battery producer in Sweden; and our 50% holding in Bruce Power in Ontario.
On the pathway to net zero we will continue to build on initiatives including our partnership with other leading pension plan investment managers to help shape a future defined by more sustainable and inclusive economic growth, and our role as a founding participant in Climate Engagement Canada. As we continue to learn and share our knowledge with others, I am also excited to share that I am taking on the role of Co-Chair of the CEO Council of the Investor Leadership Network (ILN), a prominent group of global investors working together to drive sustainability and long-term growth. Collectively, this group of 14 investors is representative of six countries and over US$9 trillion of assets under management. My Co-Chair is Marc-André Blanchard, Canada’s former Permanent Representative to the United Nations (2016-2020).
Our transition will be unique to us and will involve careful consideration and hard work to ensure the Canadian and global economies, including the rights and livelihoods of workers, continue to thrive in an evolving world. In particular, Canada’s economic success directly impacts not only our Plan and the local assets in our portfolio, but the health and wealth of our members, employers, sponsors and other stakeholders. Our approach will respect that reality.
We believe that our net zero goal is the right decision, and our approach is the right one for OMERS. The shift won’t be easy. In a recent note, our Economics team aptly pointed out the inherent complications from a transition of this nature, that must somehow coordinate the interests of voters, investors and broader civil society. But we live in a dynamic world and interesting times, and I am confident that we are up to the challenge.
Let’s go on this important and meaningful journey together.
President & CEO, OMERS