skip content
Loading indicator

Entrez le terme de recherche

FAQs about our net-zero commitment

cpp104 Net Zero Hero 0609

FAQs about our net-zero commitment

Exactly how the real economy’s transition pathways will evolve remains to be seen. This complex challenge requires us to be practical, adaptable and nimble as an investment manager. We are committed to doing our part in the best interests of helping to keep the CPP Fund secure and sustainable for generations to come.

FAQs

  • We have dedicated resources to understand and manage the risks and opportunities brought on by climate change from a financial point of view. We integrate climate change considerations into all relevant investment activities and into our risk framework. We also regularly assess companies’ risk and opportunity profiles against specific scenarios that consider physical impacts, such as changes in weather (floods or droughts, etc.), and transition-related impacts that might arise as industries transition away from traditional sources of energy. Our teams use measures such as Carbon Footprint and Climate Value-at-Risk to identify and quantify the climate risks of our investments. We then work with management at current and prospective portfolio companies and support the development of action plans to mitigate risks and or capture opportunities related to climate change.
  • We invest in companies pioneering climate change solutions, helping to finance complex transitions underway across different industries.
  • We exercise our shareholder rights in public and private markets to focus boards on climate change. In 2021 we adopted a new climate change voting policy. We respect that companies we invest in determine their own specific climate-related transition strategies. However, we expect boards and executives to have integrated climate risks and opportunities into their strategy, operations and when material, disclosure.

For details on the specific steps we are taking to address climate change, refer to our latest report on Investing in the path to net zero.

  • Net zero refers to reducing human-caused greenhouse gas emissions from the global economy to as close to zero as possible. Any remaining greenhouse gas emissions should then be balanced by removing an equivalent amount of emissions, using technology or nature-based solutions.
  • We anticipate that climate risk and the energy evolution will both create opportunities and destroy value as the world transitions to net zero.
  • Incorporating factors like climate change and the world’s transition to net zero into our decision-making will help us keep the CPP Fund safe and secure by enabling us to identify which businesses will successfully navigate the whole economy transition and avoid the risk of stranding that may occur as the economy transitions to net zero.
  • Net zero is important to us because we expect the performance of our portfolio will be influenced by how well it adapts alongside the global economy on the path to net zero.
  • Our net-zero commitment is consistent with our investment objectives and mandate. Incorporating climate change factors into decision-making helps create sustainable value for the Fund.
  • We undertook rigorous analysis, supported by pragmatism and debate, to ultimately conclude that our commitment to net zero is in the best interests of the CPP Fund.
  • We committed to net zero to help ensure the sustainability of the CPP Fund for future generations.
  • Climate change is increasingly impacting the world, necessitating, and propelling the whole economy to become net zero. That is why we’ve proactively chosen to prepare our portfolio to thrive in and contribute to a net-zero future.
  • To meet our net-zero commitment, CPP Investments will:
    • Continue to invest in and exert our influence in the whole economy transition as active investors, rather than through blanket divestment.
    • Achieve carbon neutrality for our internal operations by the end of fiscal 2023.1
    • Increase our current investments in green and transition assets from $67 billion to at least $130 billion by 2030.2
    • Build on our new decarbonization investment approach that seeks attractive returns from enabling emissions reduction and business transformation in high-emitting sectors.
  • The Fund will aim to get to net zero in accordance with its Climate Change Principles by doing the following:
    • Investing for a whole economy transition
    • Evolving our strategy as transition pathways emerge and global standards for decarbonization materialize
    • Exerting influence to create value and mitigate risk
    • Supporting a responsible transition based on our investment beliefs and expertise
    • Reporting on our actions and their impacts on our portfolio emissions

1. Across Scope 1 and 2 GHG emissions and business travel emissions, which are Scope 3.
2. Figures as at December 31, 2021. We arrived at our definition of green and transition assets by considering different frameworks and taxonomies, including the E.U. Taxonomy. We consider an asset to be green when at least 95% of its revenue can be classified as being derived from green activities, as classified by the International Capital Markets Association. We consider an asset to be transition if it has announced its commitment to net zero with a credible target and plan and is making meaningful contributions to global emissions reduction.

  • We plan to continue investing across the entire energy spectrum, from conventional energy such as oil and gas, to renewables like wind and solar power.
  • We anticipate conventional hydrocarbons will remain a considerable share of primary energy supply for many years to come. During this time, we seek to identify companies able to deliver the lowest cost and lowest emissions molecules to the market and support them in the whole economy transition. We believe these companies will not only deliver strong returns, but are critical to supporting an optimal and equitable transition of the global energy system.
  • We believe using blanket divestment as a tool to reach net zero will impede the world’s path to get there.
  • Blanket divestment from oil and gas companies, detached from investment considerations means losing the ability to enable the energy evolution by applying constructive influence through impactful engagement. We are using our influence to encourage all companies, including oil and gas, to develop viable transition strategies.
  • Though encumbered with high emissions today, we believe companies can profitably transition over the mid- to long-term, with the right interplay of leadership, accountability, innovation, and capital.
  • We recently introduced a new investment approach which aims to identify attractive opportunities to fund and support companies that are committed to creating value by lowering their emissions over time, consistent with CPP Investments’ time horizon advantage.
  • Most current initiatives to tackle the climate crisis do not address strategic sectors that are both essential and high emitting. These strategic sectors include agriculture, chemicals, cement, conventional power, oil and gas, steel and heavy transportation. The successful decarbonization of these strategic sectors is not only essential to meet wider net-zero ambitions, but also to sustain economic growth, stability, and a responsible transition.
  • We actively assess companies’ risk and opportunity profiles against specific scenarios that consider physical and transition-related impacts from climate change. We respect that companies we invest in determine their own specific climate-related transition strategies. However, we expect boards and executives to have integrated climate risks and opportunities into their strategy, operations and where material, disclosure consistent with long-term value creation for the company.
  • This means giving adequate consideration to climate-related impacts including having a defined governance structure for monitoring climate risks or opportunities, identification or quantification of these, and/or demonstrating and articulating how the company has integrated related insights into strategy and operations. We support companies leveraging the TCFD as a framework for disclosing how they identify and manage climate risks and opportunities.
  • We expect our portfolio companies to:
    • Have boards and executives integrate climate risks and opportunities into their strategy, operations and where material, disclosure consistent with long-term value creation for the company.
    • Give adequate consideration to climate-related impacts including having a defined governance structure for monitoring climate risks or opportunities, identification or quantification of these, and/or demonstrating and articulating how the company has integrated related insights into strategy and operations. We support companies leveraging the TCFD as a framework for disclosing how they identify and manage climate risks and opportunities.
  • Inconsistent emissions data and limited disclosure on the feasibility of corporate transition plans make it imprudent to set a short-term GHG emissions reduction target for CPP Investments. As data availability improves and tools emerge to diligence transition plans (such as our proposed Abatement Capacity Assessment framework) we may decide to introduce short-term targets.
  • Our commitment is made on the basis of, and with the expectation that, the global community will continue to advance towards the goal of achieving net-zero GHG emissions by 2050. These advancements include the acceleration and fulfilment of commitments made by governments, technological progress, realization of corporate targets, changes in consumer and corporate behaviours, and development of global reporting standards and carbon markets, all of which will be necessary to help enable us to meet our commitment. CPP Investments is dedicated to staying ahead of these developments that will impact our portfolio’s path to net zero.
  • We are not picking an arbitrary net-zero date before 2050 because we believe our path to net zero will be non-linear. We have however set a target to invest at least $130 billion in green and transition assets by 2030.
  • We attended the United Nations Climate Change Conference (COP26)in November 2021 to learn more about the investor’s role in helping accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change. Read the paper we presented at the conference.
  • We are one of only two global pension fund managers represented on the Task Force on Climate-related Financial Disclosures (TCFD). We are a strong supporter of the TCFD and fully adopted these recommendations by the end of fiscal 2021. Click here to view our reporting in accordance with the TCFD recommendations.
  • We are a member of the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), a global private sector-led initiative working to scale up robust, transparent and liquid markets for the trading of voluntary carbon credits in support of net-zero goals.
  • We are represented in SASB Standards’ Investor Advisory Group (IAG). The IAG includes senior investment professionals from over 50 leading global asset managers committed to improving ESG-related management and disclosure. SASB Standards guide the disclosure of financially material sustainability information by companies to their investors.
  • The Investor Leadership Network (ILN) was created in 2018 during Canada’s G7 presidency to promote collaboration between large investors on sustainability and long-term growth. CPP Investments co-leads the ILN’s Climate Change Advisory Committee, which is focused on speeding up the implementation of uniform and comparable climate-related disclosure under the Task Force on Climate-related Financial Disclosures (TCFD) Framework.
Privacy Preferences
When you visit our website, it may store information through your browser from specific services, usually in form of cookies. Here you can change your privacy preferences. Please note that blocking some types of cookies may impact your experience on our website and the services we offer.