Statement from Shift Action for Pension Wealth & Planet Health on HOOPP’s 2021 Annual Report
Statement updated March 17, 2022:
Shift’s statement on March 16, 2022 reflected text from HOOPP’s Annual Report stating that the fund was “exploring how our Fund can align with a net-zero pathway” (pg 10) and HOOPP’s TCFD Disclosures webpage, accessed March 16, 2022, which referred to HOOPP’s real estate emissions reduction goal as “an important step in our journey as we move towards a total portfolio net zero target.” These statements indicated to Shift that HOOPP had not made a formal commitment to net-zero emissions, although a commitment was mentioned in HOOPP’s media release. According to a March 16, 2022 article in the Globe and Mail, “HOOPP also said Wednesday it would join several other major Canadian pensions in committing to achieving net-zero carbon emissions in its portfolio by 2050” and HOOPP’s CEO “said HOOPP is still developing interim targets for carbon reductions.” HOOPP’s climate change page, accessed March 17, 2022, now reflects that the fund is committed to net-zero by 2050.
Shift welcomes this first step toward aligning the HOOPP portfolio with climate safety and looks forward to HOOPP developing a comprehensive climate strategy.
The statement below has been updated to reflect HOOPP’s commitment.
STATEMENT FROM SHIFT ACTION FOR PENSION WEALTH & PLANET HEALTH ON HOOPP’s 2021 ANNUAL REPORT
For Immediate Release: March 16, 2022
Toronto, ON - With today’s release of the Healthcare of Ontario Pension Plan’s (HOOPP) 2021 results and Annual Report, Shift is encouraged to see the fund finally starting to develop and announce pieces of a credible climate strategy.
In recent years, HOOPP has fallen behind its peers in acknowledging and addressing the risks and opportunities posed by the climate crisis. While today’s report and climate-related disclosures still fall well short of the steps taken by leading Canadian and international funds over the last year, we are pleased to see HOOPP laying the groundwork for what we hope will be much more significant climate commitments in the coming months.
Inaction on climate has become increasingly untenable for top investment managers, as climate-related financial risks grow and are better understood. As of this March, five other major Canadian public pension funds have now announced commitments to achieve net-zero emissions across their portfolio by 2050, along with increasing sophistication in their responses to climate-related risk. In particular, the Ontario Teachers’ Pension Plan (OTPP) and Caisse de dépôt et placement du Québec (CDPQ) have raised the bar for Canadian funds with concrete Paris-aligned targets and transparent changes to their investment approach. HOOPP no doubt was feeling the pressure to demonstrate its internal capacity to understand and respond to the existential threat of the climate crisis.
Without releasing details, a climate plan, or completing a total portfolio footprint, HOOPP has announced that it is committed to net-zero emissions by 2050. HOOPP now joins CDPQ, the OTPP, the Investment Management Corporation of Ontario, the Canada Pension Plan Investment Board, and OMERS on the list of Canada’s ten largest pension plans with net-zero by 2050 commitments (amongst a growing number of smaller funds as well).
To date, HOOPP has taken these initial steps to address climate risk:
Acknowledged the climate crisis as a distinct financial risk to the fund;
Incorporated climate change explicitly into its Statement of Policies & Procedures;
Started to monitor and disclose its investments in climate solutions. As of the end of 2021, this includes a $1 billion allocation to “carbon-efficient companies, clean energy and other climate change solutions” as well as approximately $1.4 billion invested across “green and sustainable development bonds”, “climate-resilient and clean energy infrastructure”, and “an active energy transition strategy within our public equities portfolio”;
Has begun to undertake scenario analysis and has completed a partial portfolio carbon footprint (real estate and public equities);
HOOPP’s climate change disclosures allude to a target to reduce absolute emissions in the real estate portfolio by 50% by 2030, although no baseline or further details are provided;
Announced that the plan is committed to net-zero emissions by 2050.
To build from these steps toward a credible climate strategy, HOOPP still must:
Set interim emissions reduction targets for 2025 and 2030;
Report transparently on the climate risk exposure of the fund using 1.5°C aligned scenario analysis;
Disclose transparent carbon footprinting results for the full portfolio;
In line with its participation in Climate Engagement Canada, develop a comprehensive engagement strategy which sets transparent expectations for held companies, including prohibitions on lobbying to undermine climate action and requiring credible and profitable net-zero transition plans;
Implement negative screens on new fossil fuel related investments, and targets and timelines for phasing out existing exposure to high-risk fossil fuel linked assets.
Background information on the Healthcare of Ontario Pension Plan (HOOPP):
HOOPP is the 8th largest public pension fund in Canada, with 419,627 members and $114.4 billion in assets under management. For information on its approach to climate-related financial risk as referenced in this statement, see HOOPP’s 2021 Annual Report, HOOPP’s March 16, 2022 media release Strong returns keep Plan secure for long-term benefit of Ontario’s healthcare workers, HOOPP’s 2021 Climate-related disclosures, and HOOPP’s webpage on Climate Change.
Contact information:
Adam Scott, Director, Shift Action for Pension Wealth & Planet Health
adamscott@shiftaction.ca
416-347-3858
Laura McGrath, Engagement Manager, Shift Action for Pension Wealth & Planet Health
laura@shiftaction.ca
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.