OPTrust, one of Canada’s largest defined benefit pension plans, has built on its existing Green Bond holdings with a $100 million investment in Ontario government Green Bonds. This brings OPTrust’s total Canadian Green Bond holdings to roughly one per cent of total assets under management. The Government of Ontario uses Green Bonds as a tool to help finance transit and energy efficiency projects. Ontario is currently the largest issuer of Canadian dollar Green Bonds.
“As a pension management organization, it is critical that we invest and manage our portfolio in alignment with our members’ interests,” said OPTrust CIO James Davis. “Our investment in Ontario Green Bonds aligns not only with the interests of our members, but the interests of the province and environment as a whole.”
As a responsible investor, OPTrust integrates environmental, social and governance (ESG) factors into its investment decision-making processes and ownership practices. This investment builds on OPTrust’s extensive investment experience in renewable power and green real estate.
“For OPTrust, the purpose of responsible investing lies in the recognition that ESG factors can impact investment risk and return,” said Davis. “As a long-term investor, we look at challenges and opportunities that could affect members and their retirement security across multiple generations. Climate change presents a real, measurable risk to our members that cannot be ignored in our investment approach.”
In June 2018, OPTrust released a Climate Change Action Plan which contains eight areas for action, including building climate risk into OPTrust’s investment approach and pushing for increased disclosure of climate change-related information from portfolio companies. In 2017, OPTrust also became one of the first pension plans to report in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).