• CPP Investments made demonstrable progress on meeting our 2050 net-zero commitment; achieved carbon neutrality for our own operations
• Updated Policy on Sustainable Investing to define business-relevant sustainability factors
• Continued to advance investments in green and transition assets toward our 2030 goal

Canada Pension Plan Investment Board (CPP Investments) published its 2023 Report on Sustainable Investing. The report focuses on using our active ownership and engagement to deliver results across the investment life cycle, as well as the significant progress made on our net-zero commitment to date, all in the context of a challenging investment and economic environment.

“Investing sustainably drives value for CPP Investments and is an important factor at every stage of our investment process as we help create retirement security for generations of Canadians,” said John Graham, President & CEO, CPP Investments. “CPP Investments’ approach to sustainable investing contributes to our ability to compete globally and creates long-term value in the best interests of the more than 21 million contributors and beneficiaries of the Canada Pension Plan.”

Successful capital deployment requires investors to consider an increasing number of factors related to business opportunities and risks, including sustainability, and CPP Investments continues to advance the integration of such factors in our investment decisions. This year, we updated our definitions of sustainability-related factors where they are material to the long-term success of companies.

“Sustainable investing means anticipating and managing sustainability-related material business risks and opportunities, including climate change,” said Richard Manley, Chief Sustainability Officer, CPP Investments. “We believe that these factors are dynamic, and we consider them through the investment life cycle when they are material to the investment.”

Related Article: Schroders says U.S. Institutional Investors seek opportunities in sustainable investing

Active and Principled Owners

Our active ownership model involves engagement with our portfolio companies where we believe it will create better long-term outcomes on sustainability-related matters and, in turn, generate more value for the CPP Fund. For example, we use our shareholder voting rights to ensure alignment between our expectations of directors and their actions.

During the period covered by the report we:

• Updated our Proxy Voting Principles and Guidelines to include the consideration of nature-related dependencies and the potential impacts on companies’ long-term performance;
• Voted on over 43,000 agenda items across 4,277 meetings; and
• Helped secure material commitments and improvements on climate-related disclosures and practices at 22 public companies.

Making Progress towards Net Zero

We continue to make progress on our commitment to have our portfolio and operations be net zero of greenhouse gas (GHG) emissions across all scopes by 2050. We are taking the following actions:

• Our investment in green and transition assets rose to $79 billion as of March 31, 2023, advancing toward our goal to invest at least $130 billion by 2030. We are confident in our ability to reach this target, even as progress may not be linear year-over-year.
• We have achieved carbon neutrality for internal operations across Scope 1, 2 and 3 (business travel) emissions sources for fiscal 2023. We applied our Abatement Capacity Assessment Framework to inform our plans to decarbonize operations.
• We applied our decarbonization investment approach on more than 10 existing and new assets spanning the real estate, infrastructure, agriculture, energy and tourism sectors. These initiatives helped develop transition plans that increase value in those companies and provide us with key learnings for other parts of our investment portfolio.

The full report can be downloaded here.