Managing Climate Risk in Investment Portfolios

Initially published Jan 2021

As the climate crisis with its physical impacts accelerates, along with the transition to a net-zero emissions economy, Canadian investors increasingly recognize the material and financial risks to their portfolios posed by climate risk. Increasingly large institutional investors know they must assess and manage climate-related risks if they are to meet their fiduciary duties to clients and beneficiaries.

In steps that align with The Investor Agenda, an initiative to accelerate and scale up the actions that are critical to keeping global warming to no more than 1.5 degrees Celsius, some Canadian pension plans have developed climate action plans involving low-carbon investment strategies, corporate engagement, disclosure and policy advocacy. This article explores how three Canadian pension plans, the Caisse des Depots et Placement du Quebec (CDPQ), OP Trust; and the Ontario Teachers' Pension Plan (OTPP) are addressing climate risk in their investment portfolios.

Managing Climate Risk in Investment Portfolio