CDPQ announces investment strategy to address climate change
La Caisse de dépôt et placement du Québec (CDPQ) announced today its investment strategy to address climate change. This strategy covers the entire portfolio and sets out targets and actions for CDPQ to make a constructive contribution, as an investor, to the transition toward a low carbon global economy and to seize profitable investment opportunities.
“In the wake of the Paris Agreement and changing consumer choices and technology, we are already seeing markets undergoing rapid change. This new reality has prompted us to review the risk-return profile of several industries and companies. It will also create new attractive investment opportunities for our clients,” said Michael Sabia, President and Chief Executive Officer.
“Our strategy is based on a fundamental commitment. From now on, climate change will factor in each and every investment decision we make across the breadth of our portfolio. In building this strategy, we have undertaken a thorough analysis of markets and institutional investors’ best practices. We have also been guided by our longstanding conviction that we need to think and act as builders, in everything we do. This is why we set a short-term target to increase our investments in low carbon assets by over $8 billion, and a medium-term target to reduce our carbon footprint by 25% per dollar invested. These objectives are ambitious, achievable, and measurable, and we’ll report on our progress toward them every year,” he added.false
This strategy is a first step for CDPQ, which will be better positioned to seize profitable investment opportunities and contribute to the fight against climate change. It includes:
- Factoring in climate change in every investment decision
CDPQ is prepared to accept the challenge of implementing this strategy, as its assets will increase significantly over the eight years the strategy covers. For example, if CDPQ’s assets were to grow 60% by 2025, climate change would be a factor in our decision-making on $170 billion of new assets.
Going forward, we will treat climate change in the same manner as we treat risk: as fundamental in our decision-making process.
- An $8-billion increase in low carbon investments over three years
CDPQ is already among the world’s largest investors in renewable energy, and we are committing to invest even more. As global efforts to fight climate change intensify, CDPQ’s clients will benefit from the many new investment opportunities that will materialize in the coming years. In the short term, by 2020, we will increase our low carbon investments by 50%, representing more than $8 billion in new investment. This strategy will also give us the opportunity to contribute, through our investments, to the development of a variety of industries with low carbon footprints.
- A 25% reduction in its carbon footprint per dollar invested by 2025
In the medium term, between 2017 and 2025, CDPQ commits to reducing the carbon intensity of our overall portfolio by 25%. This makes CDPQ the first institutional investor in North America to set a carbon target covering all of its asset classes. CDPQ’s efforts will support the targets of the COP21 Paris Agreement.
As part of this strategy, we will review the risk-return profile of our investments and reduce our exposure to the assets with the highest carbon intensity in our portfolio, such as activities related to coal.
Beginning in 2017, CDPQ will disclose information and data on our portfolio’s greenhouse gas (GHG) emissions as part of our annual report. We will report on our progress toward the investment targets set to address climate change.
The methodology used to measure the portfolio’s carbon footprint will be aligned with international best practices and validated by CDPQ’s auditors as part of their annual audit of financial information.
ABOUT CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at June 30, 2017, it held $286.5 billion in net assets. As one of Canada's leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure, real estate and private debt. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.
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