Earlier this summer, UPP released our Climate Action Plan, detailing our formal commitment and path to net-zero portfolio emissions by 2040 or sooner, with an emphasis on decarbonizing the real economy. The months following the release of the Plan have seen considerable progress on implementation of each of the Plan’s four pillars: Evaluate, Invest, Engage, and Advocate.
Successful investing in the markets of today and tomorrow requires a full understanding of the effects of a changing climate. To that end, UPP is working on our Climate Transition Investment Framework for a 2023 launch. Once in place, this framework will allow us to evaluate the transition alignment and readiness of our current portfolio and new investment opportunities, set a target for climate solution investments, and refine our approach to climate-related investment exclusions.
Further to our evaluation goals, UPP will undertake our first systematic scenario analysis in 2023, which will allow us to review the possible economic and financial impacts of climate change under three different climate scenarios.
We’ve also evaluated the responsible investing practices of our external managers in our portfolio to ensure long-term alignment and partnerships in support of the milestones outlined within the Climate Action Plan.
As a long-term institutional investor, UPP owns shares in companies around the world—when they do well, UPP’s fund does well too. That’s why it’s crucial to invest in companies who are preparing for the transition to a low-carbon economy, and to limit our exposure to companies unwilling or unable to adapt to a changing world.
Our Investment Exclusion Policy has been implemented for public equity investments not in comingled investment vehicles, with thermal coal included on the Investment Exclusion List. This means UPP does not directly hold shares of companies significantly involved in thermal coal-based electrical power generation or mining thermal coal.
At UPP, we firmly believe in the power of engaging investee companies on improved practices and disclosure. We recently welcomed Delaney Greig as Director of Investor Stewardship to oversee ongoing relationships and dialogue with companies, partners, and sector groups to ensure continued meaningful progress in the real economy and in our portfolio.
UPP joined Climate Engagement Canada (CEC) as a founding participant and committed to direct engagement with the top 40 emitters on the Toronto Stock Exchange. Our work on this front has already begun with calls with other investors, letters sent to companies, and by participation in company meetings in December. We look forward to providing further updates about our work through CEC in the coming months.
UPP is also supporting engagement with issuers on climate change through the International Investors Group on Climate Change (IIGCC) Net-Zero Engagement Initiative. Starting with lagging companies in Europe, the initiative is pushing for climate transition plans that include emissions reduction targets and reporting. This an opportunity for UPP to collaborate with and learn from international peers.
Ultimately, our Climate Action Plan reflects our belief that UPP has a duty to advocate on behalf of members for the good of the fund, and for the good of the economic, social, and environmental systems on which long-term fund performance relies. Our advocacy approach includes both direct and collaborative advocacy.
In recent months, we have participated in the following initiatives:
We were also the fourth Canadian organization to join the UN-convened Net Zero Asset Owners Alliance, becoming the 80th global member, collectively representing over $10.9 trillion in assets under management. The Alliance is focused on driving down GHG emissions, with stringent protocols for how investors set targets in support of a stable climate. It provides UPP with access to collaborative forums and resources that will enhance our methodologies and reporting frameworks.
Alongside the other Alliance members, UPP will participate in direct and collective advocacy with policymakers and within the financial sector to help encourage the conditions for a well-managed climate transition, including the necessary improvement and standardization of climate-related disclosures to enable informed evaluation and decisions.
UPP will continue to provide updates on our progress under our Climate Action Plan, which contains many important milestones along the path to net-zero by 2040 or sooner.
To learn more about the Climate Action Plan and UPP’s responsible investing approach, please visit:
Managing Director, Strategic Communications and External Relations
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