Canadian fund University Pension Plan (UPP), which has C$11.7bn in assets, has committed to investing at least $1.2bn in climate solutions by 2030, according to its annual report.
UPP aims to transition its investment portfolio to net zero emissions by 2040 or sooner, with its 2023 annual report revealing that the fund achieved a 14% reduction in its carbon footprint last year. In total this means a 17% reduction against the fund’s 2021 baseline, the report explained.
As part of the pension fund’s action to achieve its net zero target, UPP has established a Climate Investment Transition Framework, which has set the goal to commit at least $1.2bn to climate solutions by 2030, the annual report revealed.
Currently, UPP has committed over $400m towards this target, with $175m being invested in 2022 and $290m in 2023.
The report stated that these commitments will be made through private market funds, co-investments, direct investments and allocations in public markets or fixed income funds.
Since 2022, UPP has committed over $820m in private assets, the annual report said. One of these allocations includes a $150m fund commitment to Copenhagen Infrastructure Partners (CIP) in 2023, which focuses on investing in renewable energy infrastructure.
“Energy transition infrastructure provides an opportunity to capture attractive and stable long-term returns for our members while also promoting a sustainable future beyond our own portfolio,” stated Peter Martin Larsen, senior managing director and head of private markets investments at UPP.
Stewardship efforts
The annual report also detailed the Canadian pension fund’s stewardship, with it revealing that it voted on 55 environmental shareholder proposals in 2023.
It also highlighted that the pension fund submitted roughly 3,000 votes against director elections of companies due to insufficient board independence, lack of climate oversight, or lack of gender and/or racial diversity.
UPP is a founding participant of Climate Engagement Canada, with the group’s engagement efforts in 2023 provoking a Canadian oil and gas company to announce a target to reduce absolute methane emissions in its upstream operations by 80% from a 2019 baseline by year-end 2028.
“Clear and concerted efforts across our economy are needed to achieve a sustainable future. Our intention is to work with companies to build credible decarbonization strategies and to transition to net-zero-compatible business models,” added Delaney Greig, director of investment stewardship at UPP.
