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Canada Pension Plan Investment Board – with more than $380 billion (C$523 billion) in assets under management – firmly believes that decarbonisation begins at home. As a consequence, it has set about driving its own operations to net-zero rather than simply divesting from carbon intensive sectors.

“Decarbonising our portfolio is very different to decarbonising our own operations,” Richard Manley, managing director, head of sustainable investing at CPP Investments told AsianInvestor.

The Canadian pension fund released its 2022 Report on Sustainable Investing last month which focuses on three key areas — sustainability-related considerations in the investment life cycle, its net-zero commitment and how its active ownership delivers results.

Manley explained that while the market was focused on simply reducing financed emissions around COP26, his fund had observed there was a growing view that this may not be the most effective way for financial institutions to support decarbonisation of the global economy.

“We believe the most effective way to deliver investment returns and support decarbonisation of the economy is, as an active owner and investor, to hold portfolio companies to account to develop credible transition plans, invest in venture capital/growth equity opportunities, to develop new technologies, scale green solutions and provide transition financing to support the greening of grey sectors,” he said.

NET-ZERO OPERATIONS

The process of creating…