Caisse de depot vows to consider climate change in all its investments
The Caisse de dépôt et placement du Québec said it will increase investments in low-carbon assets by more than $8 billion by decade’s end, and set a medium-term target to cut its carbon footprint by 25 per cent per dollar invested.
"From now on, climate change will factor in each and every investment decision we make across the breadth of our portfolio," Chief Executive Michael Sabia said in a statement on Wednesday.
The fund also intends to reduce its exposure in high-carbon intensity assets such as coal.
Fulfilling the new mandate will likely involve considerable effort, given the Caisse’s enormous total asset base, which stood at $286.5 billion at the end of June.
As of December 31, 2016, 16.4 per cent of the Caisse’s public equity holdings were in the carbon-intensive energy and materials sectors, trailing only its exposure to financial services.
The depth of the Caisse’s ties to the energy patch is further borne out by the size of its positions in some of Canada’s best known energy producers and providers.
According to a regulatory filing dated August 14, 2017, the Caisse held more than 46 million shares of Enbridge, a 31-million share position in Cenovus and more than 22 million Suncor shares. In raw dollar terms disclosed, Enbridge lagged only CGI Group in terms of the Caisse’s individual positions.
The Caisse’s firm targets stand in contrast to the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan, both of which acknowledge the challenges posed but have thus far failed to enshrine climate change measures in their mandate. Both CPPIB and Teachers’ are integrating concerns into the way they assess the risk-reward profile of their investment decisions, but the pair are bound by law to put stakeholder returns above all else.
With files from Reuters