Our climate strategy aims to invest in areas that benefit from and help to accelerate the broad transition to a low-carbon future. Doing this can support long-term value creation and contributes to higher risk-adjusted returns to help pay pensions. It also aims to build a more climate-resilient portfolio by working with portfolio companies on physical climate and transition risks and opportunities.
We’ve been working closely with our portfolio companies on their emission reduction plans. In 2021, we set a target to align the portfolio companies in which we have significant stakes (minority or control) with a credible plan for net-zero emissions by 2050, known as our Paris Aligned Reduction Target (PART) program. The program focuses on providing portfolio companies a range of practical resources to support their activities and deepen their understanding of the long-term value their decarbonization actions create (e.g. cost savings through energy management and meeting customer demands). Additionally, we facilitate connections among our portfolio companies by creating platforms for them to network and collaborate.
SSEN Transmission implemented various cost saving energy efficiency measures and installed solar panels in their offices and substations. To support their goal of electrification of operational fleet by 2030, they deployed a network of EV chargers across substations and remote locations. Additionally, in 2023/24, SSEN Transmission achieved a reduction in a potent greenhouse gas1 leakage that is more than 50% above target and is on track to implement new switchgear technology.
To increase our capacity to deploy capital into companies that enable the net-zero transition, we aim to increase our green investments to reduce GHG emissions, as defined below. This helps us take advantage of attractive investment opportunities while at the same time reducing GHG emissions.
Ontario Teachers’ Finance Trust (OTFT) issues green bonds to fund investments in eligible green assets. We define eligible green assets as investments in businesses that align with our Green Investment Principles and the International Capital Market Association (ICMA) Green Bond Principles.
1 Sulfur hexafluoride (SF6) is an odourless, non-toxic gas that's used in the electricity industry and other applications. It's also a potent greenhouse gas that is 23,500x more impactful than carbon dioxide on a 100-year time frame.
