OPTrust Proposes Action on Climate Change with Release of Position Paper and Portfolio Climate Risk Assessment ReportPosted: January 31, 2017
Inadequate tools and models to measure climate change risk and impact drives $18.4 billion pension fund to call for collaboration and standardization
TORONTO, January 31, 2017 – OPTrust today released Climate Change: Delivering on Disclosure, a position paper that details the fund’s approach to navigating the complexities of climate change with respect to institutional investing and includes a call for collaboration in the development of standardized measures for carbon disclosure. The position paper is accompanied by a report by Mercer titled OPTrust: Portfolio Climate Risk Assessment which provides an assessment and analysis of the organization’s climate risk exposure across the total fund.
“Climate change impacts, and policy responses to these, will undoubtedly have repercussions on capital markets and our investment portfolio. While these impacts continue to grow, the investment industry has yet to develop a common approach to measure, model and mitigate these risks,” said OPTrust President and CEO Hugh O’Reilly. “We have been active in the conversation around climate change, and now is the time to take the next step. It is our intent in sharing these documents to engage in further dialogue with our partners and peers on developing these measures.”
OPTrust’s approach to climate change is rooted in its investment beliefs and strategy, which recognize that environmental, social and governance (ESG) factors will impact the fund’s investment risk and return, decades in the future. For pension funds, climate change presents a number of complex and long-term risks. In Canada alone, pension funds manage well over $1.5 trillion in assets, which brings a real responsibility to collectively seek innovative approaches to modeling carbon exposure and its impact across portfolios.
With assets of $18.4 billion, OPTrust invests and manages one of Canada's largest pension funds and administers the OPSEU Pension Plan, a defined benefit plan with almost 87,000 members and retirees. OPTrust was established to give plan members and the Government of Ontario an equal voice in the administration of the Plan and the investment of its assets, through joint trusteeship. OPTrust is governed by a 10-member Board of Trustees, five of whom are appointed by OPSEU and five by the Government of Ontario.
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