The US$301 billion Caisse de dépôt et placement du Québec (CDPQ) has unveiled a new climate change strategy that, it said, it will use as a road map to achieve a net-zero portfolio by 2050.
In “Climate Strategy 2021,” the Canadian pension giant lays out its four-pronged plan: hold US$41 billion in green assets by 2025 to actively contribute to a more sustainable economy; reduce the carbon intensity of 60% of its entire portfolio by 2030; set up a transition envelope of US$8billion to decarbonize the major industrial sectors’ carbon emitters; and complete its exit from oil production by the year-end 2022.
As part of its goal to hit the $41 billion-in-green-assets mark within a little more than three years, the pension fund said in the report, it is working with carbon budgets to limit the environmental impact of all of its portfolios. It also said that variable compensation for all CDPQ employees is tied to the achievement of its climate targets.
In creating an $8 billion transition envelope to decarbonize the heaviest carbon-emitting sectors, CDPQ said it wants to engage with companies and facilitate specific and measurable plans to decarbonize their operations. It is targeting sectors, it said, that are essential to the green transition such as raw material production, transportation, and agriculture.
“This commitment is essential to financing the reduction of global emissions and achieving a net-zero portfolio by 2050,” Charles Emond, president and CEO of CDPQ, wrote in the study’s foreword. “We will support companies in developing sustainable solutions and adopting best practices to foster change throughout their sectors and, ultimately, across the real economy.”
And as part of the pension fund’s commitment to completing its exit from oil production by the end of next year, it said, it will no longer invest in oil production or in the construction of oil pipelines. Instead, it will focus on projects and investment platforms that are dedicated to the transition to a sustainable economy, which, the pension fund said, will stimulate innovation in other energy sources and in carbon emission reduction.
“All climate signals clearly show that the danger for our economies and our communities is not just growing but accelerating,” Emond wrote. “Governments, businesses, and investors must act now.”