2024 Canadian Pension Climate Report Card
OVERALL SCORE
C
Healthcare of Ontario Pension Plan (HOOPP)
Climate Urgency
C+
Climate Engagement
D
Climate Integration
C
Fossil Fuel Exclusions
C-
Interim Targets
C+
Paris-Aligned Target
B-
The 2024 Canadian Pension Climate Report Card analyses, assesses and ranks the progress made by eleven of Canada’s largest pension managers and two international pension managers in their approach to climate risk and investment decisions as they relate to the climate crisis. The report is based on publicly available information to December 31, 2024.
HOOPP is a defined benefit pension plan for 460,000 Ontario healthcare sector workers and retirees, with over 670 participating employers including hospitals, family health teams, foundations, community health centres and other organizations and service providers.
Assets Under Management (AUM): $112.6 billion (December 31, 2023)
HOOPP jumped forward with the release of a climate plan in 2023. In 2024, the fund showed positive yet incremental steps in implementation, but these were not sufficient to increase the fund’s scores on five of six indicators.
HOOPP’s limited exclusion on new direct private investment in coal and oil comes into full effect in 2025, which has increased the fund’s Fossil Fuel Exclusions score from D to C-.
While the overall direction is positive, HOOPP is still falling short of taking substantive steps to signal a fully-aligned climate plan.
2024 UPDATES
Has “initiated” scope 3 data collection for “a portion” of its portfolio.
Reported reductions in both absolute emissions and intensity of emissions.
Provided examples of investment in real-world decarbonization.
OVERVIEW
HOOPP has made a net-zero by 2050 commitment and released a climate plan, but the plan and execution are not yet ambitious or comprehensive enough to be considered Paris-aligned.
For a comparison of HOOPP’s targets, or lack thereof, with respect to other Canadian pension managers, see this report’s Table 1: Emissions Reduction Targets (total portfolio) and Table 2: Additional Climate-Related Targets.
DETAILS
Having previously made a net-zero by 2050 commitment, defined net-zero and set a weak emissions intensity target (see Interim Targets section below), in 2024 HOOPP reported some progress in emissions reduction, provided examples of energy transition investments and announced that it has “initiated” scope 3 data collection for “a portion” of its portfolio.
But HOOPP has not placed a limit on the role that offsets will play in achieving its climate targets, has not meaningfully accounted for its portfolio’s scope 3 emissions, and has not joined a credible and accountable Paris-aligned investor body. Without these measures in place, HOOPP’s climate commitments cannot yet be seen as credibly aligned with science-based goals, and the fund's full exposure to climate-related financial risks will not be adequately understood or managed.
Real-world emissions reduction
HOOPP has said its plan to achieve net zero “seeks to lower our portfolio carbon footprint through real-world emissions reductions” and that its interim targets “are designed to put us on the pathway to net zero in a manner that contributes to actual decarbonization.” However, HOOPP has not yet demonstrated how its plan is contributing to real-world emissions reductions, although it made positive moves in this direction in 2024 by reporting absolute emissions reductions. HOOPP also provided examples of investments that should contribute to real-world decarbonization, such as construction of a high-voltage transmission line to deliver hydroelectric power generated in Canada to New York state, “contributing meaningfully to New York’s transition from fossil fuels.”
The fund’s engagement approach and targets for companies to have credible transition plans (see Climate Engagement and Interim Targets sections below) must be strengthened; they are not yet strong enough to decarbonize HOOPP’s portfolio on a Paris-aligned emissions pathway.
2024 UPDATES
Improved data reporting.
Has “initiated” scope 3 data collection for “a portion” of its portfolio.
Reported some progress toward emissions reduction targets.
Provided a climate solutions investment figure.
Still no baseline data or progress update for portfolio companies developing credible transition plans.
OVERVIEW
HOOPP did not report any new targets in 2024, and the fund has not yet committed to setting five-year targets from 2030 onward. For HOOPP’s score to improve in this category, the fund will need to set more ambitious and comprehensive targets.
For a comparison of HOOPP’s targets, or lack thereof, with respect to other Canadian pension managers, see this report’s Table 1: Emissions Reduction Targets (total portfolio) and Table 2: Additional Climate-Related Targets.
DETAILS
Emissions reduction
HOOPP set no 2025 emissions reduction target, and its 2030 target is significantly weaker than those of its peers (including the Investment Management Corporation of Ontario (IMCO), Ontario Municipal Employees Retirement System (OMERS), Ontario Teachers’ Pension Plan (OTPP) and University Pension Plan (UPP)) and falls short of what science demands. HOOPP has committed to reduce the emissions intensity of its portfolio carbon footprint (scopes 1 and 2, covering four asset classes) by 30% below 2021 levels by 2030.
HOOPP in 2024 reported some progress, including a 12% reduction in emissions intensity and an 11% reduction in absolute emissions from 2021 levels. The pension fund attributed this reduction to “changes in the sector weights within our largest public equity indices from market movements and new investments in low-carbon sectors in HOOPP’s private portfolios.” HOOPP also saw an increase in the amount of emissions data directly reported by companies and began to collect scope 3 data.
HOOPP has one of the only absolute emissions reductions targets among Canadian funds in its real estate portfolio, targeting a 50% absolute emissions reduction by 2030 through “direct decarbonization efforts”. In 2024, HOOPP reported overall emissions in its real estate portfolio decreasing to 193,000 tCO2e. The fund’s real estate portfolio baseline in 2019, as reported in its 2020 Sustainability Report, was 253,000 tCO2e.
Green investments
HOOPP’s 2023 commitment to invest $23 billion by 2030 in “green investments” (defined using the Climate Bonds Initiative Taxonomy) did not provide a baseline figure. In 2024, HOOPP disclosed $10 billion invested in climate solutions as of December 31, 2023.
HOOPP’s green investment commitment translated to approximately 22% of its 2022 AUM, but $23 billion will likely become a much smaller percentage of HOOPP’s AUM in 2030. In contrast, some of HOOPP’s peers have committed to grow their climate solutions as a proportion of their AUM. IMCO, for example, has committed to have 20% of its AUM invested in climate solutions by 2030.
Credible transition plans
By 2030, when the world needs absolute emissions cut by about half in order to remain on track for 1.5°C, HOOPP expects just 50% of its private equity and infrastructure portfolios to be covered by credible transition plans. HOOPP has not provided a baseline figure for this target, and did not report progress toward it in 2024.
HOOPP should strengthen this target to commit to all of its portfolio companies having credible net-zero transition plans by 2030. The OTPP has one of the most ambitious targets among Canadian funds in this regard, with a commitment that 90% of the portfolio’s carbon emissions will be covered by credible, science-based net-zero plans and targets (including scope 3 when material) by 2030.
2024 UPDATES
HOOPP’s annual report included more discussion of the fund’s climate targets and progress, but did not communicate increased urgency.
HOOPP’s Climate Disclosures and Climate Change webpages contain no year-over-year change in communication of climate urgency or of HOOPP’s role in affecting the trajectory of the climate crisis.
OVERVIEW
HOOPP acknowledges that the climate crisis is “urgent”, but falls short of identifying it as an existential risk to fulfilling the pension promise, does not recognize its own agency as a $112-billion investor with the power to affect the trajectory of the crisis, and has yet to acknowledge the accelerating climate-related impacts already affecting its own members.
DETAILS
Consistent with the release of the fund’s Climate Strategy in 2023, HOOPP’s 2023 Annual Report saw increased discussion of the pension fund’s climate targets and progress, including in messages from the Board Chair and Vice-Chair and from the President and CEO. It is a positive development to see HOOPP begin to focus on, rather than downplay, its efforts to manage climate-related financial risk, which are an essential part of the fund’s fiduciary duty to beneficiaries.
However, this increase in communication of the fund’s climate-related efforts has not been accompanied by communications that convey the accelerating impacts of the climate crisis. For example, more severe heatwaves, record-setting rainfall events and flooding, and poor air quality warnings due to intensified wildfire seasons are already impacting HOOPP members and the communities they serve.
For examples of funds communicating climate urgency, HOOPP could look to UPP, which scored an A+ in this category for its continued and public communications that acknowledge climate change as urgent and existential, describe the narrowing window to rapidly reduce greenhouse gas emissions, communicate UPP’s climate change strategy as an essential part of its fiduciary duty, recognize that failure on climate change will make UPP’s mandate impossible to fulfill, and use its platform to call on policymakers and other investors to strengthen their climate action.
2024 UPDATES
Disclosed a high level example of a 2022-2023 climate engagement escalation.
Disclosed co-leading engagements with three Climate Engagement Canada (CEC) focus list companies using Paris-aligned expectations.
Reported joining Climate Action 100+.
Signed open letter calling on the federal government to urgently implement a Sustainable Investment Taxonomy.
Submitted joint comments to the Canadian Sustainability Standards Board (CSSB), calling for alignment with International Sustainability Standards Board (ISSB) disclosure standards, including scope 3 emission disclosure.
OVERVIEW
While HOOPP has shown promising signs that it is engaging companies according to Paris-aligned expectations and has provided some examples of escalation and public support for climate disclosures, the fund is not forthcoming about its engagement activity. HOOPP’s score in this category cannot move upward until the pension fund provides transparent and timely disclosure of its proxy votes.
DETAILS
Expectations and escalation
Portfolio companies
HOOPP’s expectations for its own portfolio companies fall short of climate alignment, as the fund is targeting just 50% of AUM in the private equity and infrastructure portfolios to be covered by credible transition plans by 2030. With only 50% of these companies currently reporting greenhouse gas emissions data, HOOPP needs a robust and escalatory climate engagement strategy for its own portfolio.
Proxy Voting Guidelines
HOOPP references Paris-aligned CEC expectations for its collaborative engagements, but the pension fund’s own Proxy Voting Guidelines (effective January 1, 2024) set a lower bar on climate. HOOPP may “consider” withdrawing support for directors when climate disclosure is inconsistent with the Taskforce for Climate-Related Financial Disclosures framework and will “typically vote for reasonable policies, practices and disclosure related to material environmental and social issues”.
These Proxy Voting Guidelines are far less clear and rigorous on climate than those of many of HOOPP’s peers. For example, the British Columbia Investment Management Corporation (BCI) has considered voting for more prescriptive climate proposals since 2021, has escalated its votes against directors for climate-related reasons, and now requires publicly traded companies to incorporate climate assumptions and risk assessments into their audited financial statements. Similarly, OPTrust’s proxy voting guidelines encourage companies to have “climate-competent boards”; OTPP’s guidelines state it expects companies to provide short-, medium-, and long-term greenhouse gas emissions reduction targets and report their progress towards those targets; UPP has committed to a year-over-year strengthening of its climate-related proxy voting guidelines; and IMCO’s guideline spells out specific net-zero-aligned requirements for management-sponsored proposals on climate change. In contrast to HOOPP’s stated preference for engaging privately, IMCO’s guideline also specifies that the investment manager ”is transparent about our proxy voting activity and makes proxy voting records available on our website.” HOOPP is the only one of the Maple 8 pensions that does not publicly disclose how it votes on individual items.
Examples
HOOPP’s disclosure of examples of engagement is too short on detail to be evaluated. For example, the fund claims to have been making board director voting decisions “based on a company’s […] level of climate disclosures”, but provides no proxy voting record to verify this. Analyses of Canadian investors’ proxy votes, when available, have highlighted inconsistent votes on climate, including on shareholder proposals flagged by CA100+ and CEC.
HOOPP further said it supported 45% of “environmental or social” shareholder proposals and 43% of climate-related proposals. But without disclosure of HOOPP’s voting record, it is unclear if those proposals warranted HOOPP’s support or opposition.
In its 2022 and 2023 Annual Reports, HOOPP has disclosed communicating with companies about its “expectations” on climate change, without disclosing whether these expectations might include anything beyond simple disclosure.
HOOPP provided one high-level example of engagement in its 2023 Annual Report:
“In 2022, we took voting action against the chair of the committee responsible for sustainability for an industrials company, due to lack of climate disclosures. Following our vote, we engaged with the company to discuss our view. In 2023, the company published its first climate report and set a target for reducing scope 1 and 2 emissions by 2030. We are now monitoring the company’s actions and progress towards the emissions reduction target.”
It is a positive sign that HOOPP has revealed this example when to date the pension fund has rarely disclosed anything regarding its climate-related engagements. But without further details, it is impossible to assess if this engagement can be considered successful, or if it is representative of HOOPP’s broader engagement on climate. Engagements such as this would be strengthened if HOOPP set out clear expectations that companies have credible, science-aligned transition plans and if HOOPP had an escalatory, time-bound engagement process to ensure companies come into alignment.
Falsely implying that engagement and divestment are mutually exclusive
In two places in the 2023 Annual Report, including the message from the Board Chair and Vice-Chair, HOOPP states that it is focusing on engagement rather than divestment in order to “help steer companies toward credible net-zero plans” and that it believes this approach will better result in actual or real-world impact.
While engagement can be a worthwhile approach when companies have feasible pathways to net-zero, engagement is a dead end with the fossil fuel sector. The sector’s current “real-world impact” is to increase greenhouse gas emissions and worsen global heating. The only pathway that fossil fuel companies’ have to net-zero emissions is the phase-out of production and early retirement of infrastructure. If HOOPP is intent on engaging these companies, it should make these expectations clear. The business model for coal, oil and gas is fundamentally dependent on the failure of the “credible net-zero plans” that HOOPP claims to be steering other companies towards. For sectors that are unwilling or unable to align with a credible net-zero plan within a set timeline, HOOPP should sensibly limit its exposure by divesting. Sticking with fossil fuel companies as they decline in the coming years would be a breach of HOOPP’s fiduciary responsibility.
External managers
It is unclear what direction, if any, HOOPP provides to external managers regarding climate-related risk. Nor has the fund disclosed what percent of AUM is managed externally or if it screens external managers for net-zero commitments. The fund’s Climate Disclosures say only that “For externally managed funds, we review and evaluate the external manager’s approach to assessing and managing climate risk in their investment process.” HOOPP’s approach should be contrasted with that of UPP, IMCO and OPTrust, all of which have spelled out more comprehensive climate-related due diligence when it comes to leaving members’ retirement savings in an external manager’s hands. UPP has taken the additional step of disclosing each year a list of the external managers with $50 million or more of UPP’s AUM.
Collaborative engagement
HOOPP’s participation as a founding member of CEC and, more recently, as an investor participant in Climate Action 100+, provide an avenue for HOOPP to get its toes wet in aligning its engagements and advocacy with the goals of the Paris agreement. HOOPP disclosed co-leading engagement with three CEC focus list companies using Paris-aligned expectations. HOOPP also supported a CEC initiative to host conversations with CDP and corporate issuers on target setting and transition planning.
Policy engagement
HOOPP encouragingly put its name behind two calls for clearer and improved disclosure standards, by signing a joint statement in support of aligning CSSB standards with ISSB standards and adding its name to an open letter calling for Canada to rapidly implement a sustainable finance taxonomy. HOOPP should continue to use its voice to call for more rigorous climate policy and climate-aligned financial regulation. Without such policy and regulation in place, climate impacts will continue to worsen, and HOOPP will find it increasingly difficult to fulfill its pension promise.
2024 UPDATES
Made some improvements in emissions data, including reporting absolute emissions for the first time, improving the amount of emissions data directly reported by companies, and beginning scope 3 data collection.
Continues to have one fossil fuel entangled director on the Board.
In December 2024 named an incoming President and CEO (effective April 1, 2025) that, at the time of the announcement, was an executive vice president at pipeline company TC Energy.
OVERVIEW
HOOPP is moving in the right direction, with continued attention to climate change at the governance level and slow but necessary improvement to climate and emissions data metrics, but has not yet made sufficient progress to raise its score in this category.
DETAILS
Accountable Paris-aligned membership
HOOPP is not a member of any accountable and credible Paris-aligned investor body.
Transparency and disclosure of holdings
HOOPP provided more examples of green investments and climate engagement in its 2023 Annual Report, but still does not disclose its investments or specifically its high-carbon assets. Based on the fund’s disclosure, it is difficult to find even basic information about HOOPP’s investments, such as the composition of its portfolio by asset class.
Transparency and disclosure of climate risk
HOOPP has a current climate plan (2023) and has been playing catch-up with other funds to ensure it has a comprehensive set of climate metrics.
As of reporting for the 2023 calendar year, the fund’s emissions data metrics are not yet accompanied by third party limited assurance and are not yet included as part of HOOPP’s Annual Report. The portfolio carbon footprint (scopes 1 and 2) is limited. It covers an undisclosed proportion of AUM and includes four asset classes: public equity, real estate, private equity and infrastructure. HOOPP has made no statements on how it assesses, calculates or manages climate risk in its bonds portfolio. According to the fund’s January 1, 2024 Statement of Investment Policies and Procedures, the fund’s target allocation to nominal and real return bonds totals 48%.
In the fund’s 2023 Climate Disclosure (available only as a webpage), HOOPP for the first time reported absolute emissions, including for 2021, 2022 and 2023; reported an improvement in the proportion of directly reported data; provided a data quality score for three years of emissions data; and said it has “initiated” scope 3 data collection in a “portion” of the portfolio.
HOOPP provided some detail on the scenarios used to model physical and transition risks to the fund, and reported that the fund is undertaking asset level analysis of physical and transition risk. However, HOOPP has not disclosed insights gained or actions taken as a result of climate scenario analysis and makes no statements about how the fund would be affected under different climate scenarios.
Board climate expertise and/or fossil fuel entanglement
HOOPP’s 16-person Board of Trustees is appointed by the Ontario Hospital Association (eight appointees) and settlor unions (four unions with two appointees each). While union appointees bring crucial perspectives, skills and experience to the Board, they understandably may not have climate expertise without significant additional training.
HOOPP has taken steps in this direction over the last few years, noting that the Board has received special education on climate change and governance, set climate change as a standing agenda item at quarterly board meetings, separated climate change from ESG at the governance level, and secured an external advisor on climate governance. A 2023 article by then Board Chair Gerry Rocchi also noted that some trustees had taken the Institute of Corporate Directors’ (ICD) Governance of Climate Change course. However, as of November 2024, this ICD course appears to have ties to the fossil fuel sector through its faculty, through the course’s co-host Chapter Zero Canada’s Climate Strategy Advisory Board Members, and through Cenovus Energy’s sponsorship of Chapter Zero.
HOOPP Trustees must formalize a board level commitment to have deep climate expertise on the board in order to effectively govern the fund through the worsening climate crisis and accelerating energy transition.
The Trustees must also proactively limit potential conflicts of interest by establishing a time period that must elapse between holding a directorship at a fossil fuel company and sitting as a HOOPP Trustee. Trustees with current fossil fuel entanglements should not be reappointed.
Since Shift began tracking fossil fuel entanglements in 2022, HOOPP has had one entangled director. Trustee Nicholas Zelenczuk is simultaneously a director of Teine Energy. In March 2024, Teine signed on to an open letter from the Calgary Chamber of Commerce to Canada's Minister of Environment and Climate Change calling for the withdrawal of the federal government’s proposed oil and gas emissions cap and a delay to the proposed Clean Electricity Regulations, two crucial climate policies to drive down emissions in the oil and gas and electricity sectors, respectively. This advocacy against climate policy by Teine directly contradicts HOOPP’s own net-zero commitment and underscores the obvious conflict of interest between Zelenczuk’s fiduciary duty to HOOPP members and his legal obligation to maximize profit for Teine shareholders by extracting more oil and gas. More broadly, this example illustrates why a fossil fuel entangled director must be required to recuse themselves when pension fund governance discusses climate strategy - which HOOPP governance purports to do at quarterly board meetings. Boards striving for credible climate plan governance should unencumber themselves from fossil fuel entangled directors.
Executive compensation and climate
It is unclear which climate-related targets HOOPP considers in compensation, or how these targets are considered. According to the fund’s Climate Strategy, “Investment management performance objectives also have a climate-related component that is linked to compensation” (p.12). HOOPP’s 2022 and 2023 Climate Disclosures contained similar language. A September 2023 opinion piece by HOOPP’s board co-chair stated that the Board had commissioned research on incorporating climate objectives into incentive compensation.
Incoming CEO and President
HOOPP announced an incoming President and CEO (effective April 1, 2025) in December 2024. Incoming CEO Annesley Wallace will be leaving a position as executive vice president at pipeline company TC Energy. Given that company’s regressive track record on climate, HOOPP members may well be concerned at this connection. It remains to be seen if Ms. Wallace will work quickly to strengthen the pension fund’s climate commitments.
2024 UPDATES
Reported no new direct private investment in thermal coal or oil exploration and production companies in 2023, in keeping with the fund’s commitment to exclude such investment by 2025.
OVERVIEW
HOOPP’s 2025 commitment to exclude new direct private investment in thermal coal or oil exploration and production companies is de facto in place at the end of 2024. HOOPP could increase its score further in this category by broadening the exclusion to include gas and related infrastructure and extending its exclusion to cover all asset classes.
For a comparison of HOOPP’s fossil fuel exclusions, or lack thereof, with respect to other Canadian pension managers, see this report’s Table 3: Fossil Fuel Exclusions. For a list of all of the disclosed fossil fuel investments held by Canadian pension funds analysed in this report, see this report's Table 4: Fossil Fuel Investments.
DETAILS
HOOPP’s 2023 Annual Report disclosed that the fund had begun to exclude new direct investments in thermal coal and oil, in keeping with its 2025 commitment.
With a relatively low allocation to fossil fuels in its public equities portfolio, HOOPP is well positioned to take the next step and completely eliminate its exposure to the fossil fuel industry. HOOPP’s Sustainable Investing Policy (effective May 24, 2023) recognizes that exclusions make sense “where engagement is ineffective”. The coal, oil and gas sector has repeatedly shown itself to be either unable or unwilling to align with a safe climate trajectory despite years of investor engagement. These holdings expose HOOPP to unnecessary financial risks. An obvious next step would be for HOOPP to divest of, and exclude new investment in, publicly-traded fossil fuel companies that fail to meet objective climate criteria, such as companies on the Global Oil and Gas Exit List and Coal Exit List.
For a comparison of HOOPP’s fossil fuel exclusions, or lack thereof, with respect to other Canadian pension managers, see this report’s Table 3: Fossil Fuel Exclusions. For a list of all of the disclosed fossil fuel investments held by Canadian pension funds analysed in this report, see this report's Table 4: Fossil Fuel Investments.
ESTIMATED INVESTMENTS IN FOSSIL FUELS
$1.44 billion
HOOPP provides no disclosure of its investments by sector and has never reported if it has private investment in coal, oil, gas or related infrastructure.
A limited and likely incomplete estimate of HOOPP’s investments in publicly-traded fossil fuel companies can be made by analyzing the pension fund’s regulatory filings to the U.S. Securities and Exchange Commission. A comparison of September 30, 2024 filings to September 30, 2023 filings show HOOPP’s minimum exposure to publicly traded fossil fuel companies decreasing as a percent of AUM from 2.03% in 2023 to 1.28% in 2024.
Overall
Publicly acknowledge the consensus science, including from the Intergovernmental Panel on Climate Change and the International Energy Agency, that limiting global temperature increase to 1.5°C requires an immediate end to fossil fuel expansion as well as the rapid phase-out of oil, gas, coal and related infrastructure.
Become a vocal proponent of stringent, ambitious, Paris-aligned climate and energy policies that provide certainty for companies and investments.
Join a credible and accountable Paris-aligned investor body, such as the Net-Zero Asset Owner Alliance or the Paris Aligned Asset Owners.
Paris-aligned target
Develop and execute a plan to achieve real-world decarbonization.
Report scope 3 emissions and develop scope 3 emissions reduction targets.
Place a limit on the role of carbon offsets and credits in achieving targets.
Interim targets
Continue to improve data reporting.
Make an interim commitment to reduce portfolio emissions intensity before 2030.
Strengthen 2030 emissions reduction targets to be science-aligned.
Commit to all portfolio companies having credible net-zero plans in place by 2030.
Build on the real estate portfolio’s absolute emissions reduction target by setting absolute targets in other asset classes.
Establish Scope 3 emissions reduction targets.
Communication of climate urgency
Communicate that everyone, including HOOPP’s beneficiaries and health care workers dealing with the health impacts of climate change here in Ontario, is already experiencing the impacts of the accelerating climate crisis.
Acknowledge that HOOPP’s investment decisions and decarbonization approach influences the trajectory of the climate crisis.
Recognize that the climate crisis poses an existential risk that could threaten the fund’s ability to achieve its mandate.
Climate engagement
Create a stronger signal for portfolio company climate alignment by requiring 100% of assets in private equity and infrastructure portfolios to be covered by science-based net-zero targets and strategies by 2030.
Clarify that HOOPP’s engagement approach, whether engaging individually or collaboratively, is grounded in an expectation for companies to have Paris-aligned climate targets and plans.
Develop a timebound climate engagement strategy with escalation measures up to and including divestment. Set targets to measure the success of climate engagements. Disclose progress and escalation.
Ensure engagement strategy distinguishes between sectors that have a profitable pathway to transition their business model and those that do not.
Begin disclosing proxy votes individually, in real-time and with rationale for votes.
Strengthen Proxy Voting Guidelines to require companies to have science-based decarbonization plans. Spell out Paris-aligned expectations for management-sponsored climate plans.
Set an expectation that owned companies:
tie executive compensation to the achievement of climate targets;
refrain from lobbying against climate action, directly or through industry associations; and
refrain from directing capital toward fossil fuel expansion.
Establish timebound, results-based targets for engaging with external fund managers on Paris-alignment.
Require that all new or renewed external fund manager contracts adhere to a Paris-aligned investment strategy.
Build on limited forays into advocacy with increasingly vocal and frequent support for climate-aligned policy and regulation.
Climate integration
Improve transparency and disclosure of approach to climate risks and investments.
Complete total portfolio carbon footprint. Improve granularity of disclosure and obtain limited third party assurance.
Complete 1.5°C scenario analysis and disclose results.
Develop a Board competencies framework and include climate expertise as a required competency.
Avoid conflicts of interest and refrain from re-appointing directors with simultaneous corporate directorships with fossil fuel companies to the Board.
Establish minimum time that must elapse in between holding a fossil fuel directorship and joining the board.
Disclose the weighting of climate targets in compensation.
Fossil fuel exclusions
Place an immediate exclusion across all asset classes on any new investments in coal, oil, gas and pipelines.
Make a timebound commitment to eliminate all fossil fuel exposure from the portfolio.
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