Canada Pensions Plan Investment Board, which recently pumped $330m into Octopus Energy, targets net zero portfolio by 2050
CPP Investments is to double its current green investment portfolio to at least $130bn by the end of the decade, as part of a fresh commitment from the Canadian pensions giant to achieve net zero greenhouse gas emissions across its entire $550bn portfolio by 2050.
Canada Pensions Plan Investment Board (CPP Investments) announced yesterday that it is already on course to achieve ‘carbon neutrality’ across its internal operations and business travel by the end of the 2023 fiscal year.
But now it is also aiming to achieve net zero emissions across its Scope 1, 2 and 3 emissions, including its massive investment portfolio by mid-century.
“The impacts of climate change on the investment landscape are undeniable and have fundamentally transformed the nature of business risks and opportunities,” said CPP Investments president and CEO, John Graham. “Committing our portfolio and operations to net zero by 2050 will help us manage the risks, capture the opportunities, and deliver on our public purpose – to help generations of Canadians build financial security in retirement.”
In order to decarbonise its investment portfolio, the firm – which recently pumped $330m into rapidly expanding UK green energy firm Octopus Energy Group – said it would continue its transition to net zero by increasing its investments in green and transition assets from $67bn today to at least $130bn by 2030.
The company said it had developed its own definition of ‘green’ and ‘transition’ assets for its investment strategy based on a variety of frameworks, including the EU’s new green taxonomy.
Its definition of ‘green’ and ‘transition’ investments includes companies deriving at least 95 per cent of their revenue from green activities – as classified by the International Capital Markets Association – or which have announced a credible net zero target and greenhouse gas reduction plan, it said.
However, CPP Investments said it had no immediate plans to stop investing in oil and gas firms, as it expected conventional hydrocarbons to “remain a considerable share of primary energy supply for many years to come”. It also argued blanket divestment would “impede” the global economy’s transition to net zero emissions.
The company also declined to set a short-term emissions reduction target for its portfolio, arguing that “inconsistent emissions data and limited disclosure on the feasibility of corporate transition plans make it imprudent”.
“Our commitment to achieving net zero by 2050 is aligned with how CPP Investments has been incorporating ESG considerations – in particular climate change – into our investment decisions for more than a decade,” said Deborah Orida, the firm’s global head of real assets and chief sustainability officer. “We believe the performance of our portfolio and the generation of long-term investment returns relies upon our ability to adapt to a global economy that is moving toward net zero.”
Want to find out more about how the net zero transition will impact your business? You can now sign up to attend the virtual Net Zero Finance Summit, which will take place live and interactive on Tuesday 29 March and will be available on demand for delegates after the event.