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- NEWS
- December 10, 2024
Progress on UPP’s Climate Action Plan in 2024
Through our Climate Action Plan (CAP), launched in July 2022, UPP aims to achieve net-zero greenhouse gas emissions by 2040 or sooner in our investment portfolio. Our CAP also focuses on building climate resiliency and decarbonizing the real economy. We report annually on our progress toward our goals, as outlined within the CAP.
Our 2024 progress stands to help UPP manage the impacts of climate on fund performance and capitalize on opportunities that can enhance our ability to provide pension benefits to our members over the long term. Here are this year’s highlights across our CAP’s four pillars: Evaluate, Invest, Engage, and Advocate.
Evaluate
Last year, UPP published our first Climate Transition Investment Framework (CTIF), which helps us assess the climate transition alignment and readiness of our portfolio and new investment opportunities. The CTIF was fully incorporated into our due diligence process in 2024, ensuring that potential investments were evaluated against the framework’s criteria. By applying the framework consistently throughout the year, we ensured that our new mandates and co-investments adhered to its minimum standards. To support the CTIF’s implementation in our fund investments, we engaged with our external managers throughout the year to familiarize them with this new framework and how it is used.
More about UPP's Climate Transition Investment Framework
Our first Climate Transition Investment Framework was developed to support several commitments in our Climate Action Plan, including to:
- Evaluate climate transition risks, opportunities and impacts of our current and prospective investments at the total fund and investment mandate levels,
- Invest only in new mandates and assets that align with the transition to a net-zero world,
- Set a target for new investments in climate solutions, and
- Inform priorities and focus for engagement with portfolio companies, external investment managers and partners.
We will continue evolving our approach in future iterations of this framework. Learn more about our Climate Transition Investment Framework.
Invest
To capitalize on opportunities related to the transition to a low-carbon economy, UPP established a target to commit at least $1.2 billion in climate solutions by 2030. Climate solutions are companies and technologies that can help mitigate the effects of climate change and adapt to a changing climate. Our target, which encompasses investments spread across various asset classes, includes companies and technologies aimed at mitigating the effects of climate risk and facilitating adaptation to its impacts.
2024 climate investing highlights
In 2024, we completed several investment transactions qualifying as climate solutions under the criteria outlined in our CTIF, including:
UPP’s 2024 Annual Report will further detail our investments in climate solutions over the past year. Learn more about our investments.
Engage
UPP’s Climate Stewardship Plan (CSP), also published last year, outlines goals and focus areas for our climate-related stewardship activities. Under this plan, UPP is engaging in dialogue with priority companies on actions needed to decarbonize their businesses and support the economy-wide transition to net-zero. These efforts, along with enhanced proxy voting guidance, are key tools within the stewardship toolkit to encourage the net-zero transition and adequate climate-related disclosure.
2024 engagement and proxy voting highlights
Throughout 2024, UPP implemented the engagement, voting and advocacy aspects of our Climate Stewardship Plan.
- During the 2024 proxy season, UPP voted against directors at 14 percent of public companies in our portfolio due to inadequate board oversight of climate-related matters or insufficient climate action in high-impact sectors. To reinforce our message, we contacted over 30 of these companies to explain our decision. UPP engaged in bilateral and collaborative dialogues, working with SHARE and Climate Engagement Canada, with all 27 companies prioritized for engagement in our Climate Stewardship Plan.
- Of these, six high-emitting Canadian companies made progress on one or more of our engagement priorities including new emissions disclosures, additional details on their decarbonization strategies, or new science-based emissions reduction targets.
- Three banks committed to additional disclosures and setting targets in 2025.
- We are reviewing the information gained through our initial engagements with 11 oil and gas companies and will refine our position regarding these companies as appropriate.
- We expanded our external manager engagement program, which aims to support the improvement of responsible investing practices. As we build collaborative relationships, we monitor the actions adopted by our investment partners to manage climate-related risks and opportunities while providing them support as they advance their climate journey.
- In 2024, we engaged 16 existing managers and evaluated four managers. As part of our dialogue with managers, we encouraged efforts to submit emission reduction targets for Science Based Targets Initiative validation, enhance proxy voting policies informed by climate commitments, implement processes to measure and manage physical climate risks, and communicate climate expectations to portfolio companies more decisively.
- Our continued participation in the Net-Zero Asset Owner Alliance (NZAOA) amplified our message through industry positions, guidelines, and collaborative efforts to address the challenges external managers face and provide clarity on the needs of asset owners.
For more details on our voting activity, see UPP’s real-time proxy records and quarterly reports.
Advocate
In 2024, policy advocacy was a major focus of our Climate Stewardship Plan implementation, especially on topics such as emissions disclosure standards and climate transition plans, which are crucial for climate transition and risk mitigation. We supported improved sustainability and climate-related disclosure requirements in Canada and abroad. Following the International Sustainability Standards Board’s publication of new sustainability and climate-related disclosure standards in 2023, UPP responded to local consultations in nine international jurisdictions, including Australia, China, and Japan, advocating for full alignment with these standards. Additionally, we issued our own response to the Canadian Sustainability Standards Board (CSSB), contributed to a to the CSSB, and our President and Chief Executive Officer Barbara Zvan published an op-ed advocating for swift adoption and alignment with the international standards.
2024 advocacy highlights
- UPP supported industry climate action initiatives through CDP climate disclosure campaigns, NZAOA engagement and policy activities, and our involvement in CEC.
- Our collaboration with the Institutional Investors Group on Climate Change (IIGCC) allowed us to contribute to policy discussions and initiatives aimed at decarbonizing key sectors.
- We signed several statements, including the Global Investor Statement to Governments on the Climate Crisis, which reflect our dedication to addressing climate risk through collaborative action. Read our statements and submissions on our website.
UPP provides progress updates on our CAP annually. To learn more about our climate action and responsible investing approach, please visit:
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