Caisse de dépôt to exit oil production by end of next year in new climate strategy

Article content

Caisse de dépôt et placement du Québec is ramping up its targets in reducing the carbon emissions footprint of its investment portfolio, including exiting oil production by the end of next year.

Article content

The Canadian pension fund giant launched a new climate strategy on Tuesday, aimed at achieving a net-zero portfolio by 2050. As investors seek out sustainable investments, Canada’s pension managers have been calling on companies to beef up their environmental, social and governance initiatives.

Article content

The leaders of Canada’s eight largest pension funds in November announced a joint call for companies to beef up their ESG disclosures by standardizing their data reporting. The funds included the Caisse, Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan.

The pension fund, which manages $390 billion, added two new goals to its climate action strategy on Tuesday. The Caisse aims to divest completely from oil production by the end of 2022, which accounts for one per cent of its portfolio.

Article content

While the Caisse said it will not invest in pipeline projects and companies moving forward, it will maintain its current pipeline investments, which makes up nearly 2 per cent of its portfolio.

The Caisse will also add a $10 billion transition fund to help the largest industrial carbon-emitting sectors reduce their footprints, including transportation, agriculture and raw material producers.

It is also increasing its targets on two previous milestones. The Caisse said that it aims to hold $54 billion in green assets by 2025, including renewable energy, sustainable transportation and real estate.

The institutional investor is also targeting a 60 per cent reduction in the carbon intensity of its portfolio by 2030.

Article content

The Caisse said that it has surpassed the milestones it set in its first climate strategy, launched in 2017. It had planned to reduce the carbon footprint of its portfolio by 25 per cent by 2025 and boost investments in renewable energy by 50 per cent, or $8 billion, by 2020.

“Four years after adopting our first climate strategy, we reached and even exceeded our targets,” said Kim Thomassin, Caisse executive vice-president and head of investments in Québec and stewardship investing. “With our new strategy, CDPQ taking action on the climate on several fronts, engaging directly with companies, while investing even more in green assets.”

• Email: [email protected] | Twitter: StefanieMarotta