Photo by K2 Space via Flickr. CC by 2.0.Climate concerns will be central to the investment decisions of Canada’s second-largest pension fund, CEO Michael Sabia announced last month. The Caisse de dépôt et placement du Québec will slash the carbon footprint of its investment portfolio 25 percent by 2025. The fund will increase low-carbon investments by 50 percent, or more than $8 billion, by 2020.
The announcement marks the latest call for more transparency regarding corporate strategies for transitioning to a low-carbon economy. A growing number of institutional investors that includes Vanguard and BlackRock Inc are asking how companies will protect their capital from climate risk. Firms in carbon-intensive industries such as energy and mining are facing the greatest pressure, owing to concerns about the possibility of stranded assets.
A lack of consistency among corporate disclosures may be the biggest challenge for investors. “There aren’t defined standards on exactly what companies should be measuring and how to measure it and how to report on it,” according to Andrew MacDougall, a partner at Osler, Hoskin & Harcourt LLP who specializes in corporate governance. “The practices tend to vary between issuers, not only in terms of the amount of disclosure that is available, but also the elements that are disclosed.”
Read the full article at The Globe and Mail.