Investment Management Corporation of Ontario (IMCO)
Portfolio level – Portfolio decarbonisation reference target
Baseline date: 31 December 2019
Baseline performance: 75 tCO2e / $mCAD invested
Target year: 2030
Target(s): 50% reduction in portfolio carbon emissions intensity by 2030.
GHG scopes included: Our target covers scope 1 and 2 for all sectors.
Financed scope 3 emissions are not included in the carbon reduction target due to limited data availability, comparability and reliability. We will explore the feasibility of establishing scope 3 targets once we can confidently measure scope 3 emissions.
Asset classes in scope: Public Equity, Private Equity, Global Credit, Real Estate and Infrastructure.
We established targets for assets classes where we measure emissions. We calculate the portfolio emissions of the following asset classes covered under PCAF (Partnership for Carbon Accounting Financials) guidance: Public Equity, Private Equity, Global Credit, Real Estate and Infrastructure. Combined, these portfolios represent 70% of IMCO’s assets under management as of December 31, 2021. Most of the remainder comes from government bonds and public market alternatives which PCAF methodology did not cover. We strive to measure emissions for all investments where PCAF publishes guidance and where we have sufficient data availability. We will update our financed emissions calculation over time as data quality, coverage and methodologies improve.
We will also consider updating our targets to include additional assets classes if appropriate, based on industry guidance and practicality of implementing targets for those asset classes in IMCO’s portfolio.
Please see our ESG/TCFD Report for detailed disclosure of methodology for asset classes included in emissions measurement.
Methodology/net zero scenarios: We measure emissions in line with PCAF.
We analysed multiple net zero pathways to determine our target, including IPCC, IEA, NGFS, and OECM.
Emissions metrics: We disclose both absolute emissions and emissions intensity in our annual ESG/TCFD Report.
Portfolio level – Investment in climate solutions target
Target years: 2030
Target: 20% of portfolio invested in climate solutions
Methodology: IMCO defines climate solutions as companies or projects that derive at least 50% of their business from products or services that provide climate solutions , including i) renewable energy/alternative fuels, ii) energy efficiency/clean technology, iii) green buildings, iv) clean transportation, v) climate change adaptation, vi) circular economy / recycling, vii) pollution prevention & emission control, viii) sustainable agriculture & natural capital, ix) sustainable water & wastewater management, x) terrestrial and aquatic biodiversity.
We define climate solutions in accordance with the Green Bond Principles as set out by the International Capital Markets Association (ICMA).
Asset level – Portfolio coverage target
Approach: We will take a common set of actions across assets classes to achieve our interim climate targets and drive real world emission reductions, including but limited to:
1. Capital Deployment
• increase investments in climate solutions
2. Portfolio Management
• prioritise partnerships with external managers that have existing or intended net zero commitments
• increase investment in companies with net zero commitments
• reduce high emitting passive exposure and allocate to lower emitting strategies
3. Asset Ownership
• support external managers and portfolio companies in establishing Paris-aligned plans and delivering portfolio emissions reduction
• engage with external managers and portfolio companies to increase the share of its portfolio reporting emissions data
• exercise our right to vote at shareholder meetings, to encourage companies to manage climate-related risks and opportunities
• collaborate with like-minded investors and policymakers to drive collective climate action
4. Climate Guardrails
• phase out new investment commitments in development of new unabated fossil fuel assets, in line with appropriate global, science-based scenarios
• limit exposure to investments in thermal coal mining and arctic drilling
Asset level – Engagement threshold target
Approach: See ‘Asset Ownership’ actions above.
Methodology: Our interim target is consistent with delivering a fair share of the 50% global reduction in CO2 emissions by 2030 identified as a requirement in the Intergovernmental Panel on Climate Change (IPCC) special report on global warming of 1.5°C.
Operational emissions: We measure and track our operational emissions, and report publicly in our ESG report. Please see our ESG Report for operational emissions disclosure.
Fossil fuel investment: We will phase out new investment commitments in development of new unabated fossil fuel assets, in line with appropriate global, science-based scenarios and limit exposure to investments in thermal coal mining and arctic drilling.
Investment Management Corporation of Ontario (IMCO) case studies
IMCO: Climate action planning
3 April 2023