Municipal employee pension fund commits to zero net emissions by 2050

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The Ontario Municipal Employees Retirement System, Kingston’s municipal employee pension plan, pledged this week to achieve net zero emissions by 2050.

OMERS ‘recent announcement is in line with the net zero commitments of other major pension funds in Canada, including the Caisse de dépôt et placement du Québec, the Ontario Teachers’ Pension Plan and the Investment Management Corporation of Ontario, and just six weeks after City council passed a motion calling on the pension fund to implement targets to phase out fossil fuels and invest in renewable energy.

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“We saw action from city councils, and the resolution that was passed by Kingston, I think, was very important and increased the pressure on the plan to have a cohesive response to the climate crisis. I can also say that at the international level, a large and growing number of large pension schemes are moving towards finally setting up a plan to align their investments (with the 2050 objective of the Paris Agreement), ”Adam Scott, director of Shift: Action for Pension Wealth and Planet Health, said in an interview with The Whig-Standard.

While this week’s announcement does not commit to disengaging from fossil fuels, Scott believes this is an important step for both the health of the planet and the sustainability of the fund’s investments.

“The commitment that was made, they don’t have a plan in place yet to meet, I think that’s fair to say. But we can give them some credit. They just announced this long-term goal, (so) they’re obviously going to come back with more details, ”Scott explained.

The goal of achieving net zero emissions by 2050 builds on an existing OMERS commitment to reduce the carbon intensity of the total portfolio by 20% by 2025, which Scott says will require divestment of fossil fuels.

“It will be very difficult for a pension fund like OMERS to stay heavily invested in fossil fuels and achieve any interim target it sets for itself. The biggest carbon in their portfolio needs to be phased out quickly, ”Scott said.

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While he believes some higher carbon industries have room to decarbonise, there is no viable path to net zero emissions for the production and transportation of fossil fuels.

“Many companies have credible and profitable pathways to decarbonize over time, but overall fossil fuel companies don’t… there is no credible path for companies that mine, produce and transport fossil fuels directly for combustion. This is why we distinguish fossil fuels as being of particularly high risk, ”he said.

While Scott is happy to see a commitment to reduce emissions, he expressed concern about the ambiguity of “net-zero” emissions.

“Net-zero is sort of an attempt to provide some flexibility on a global scale,” he explained. “It’s interpreted very problematically in most of these (engagements), and I guess net zero could mean that they (think they) can somehow buy offsets or whatever.” thing, which is just not true. For an investor like OMERS, the portfolio really needs to reach absolute zero emissions by 2050. ”

Despite some concerns, Scott is pleased to see OMERS follow the lead of other major pension funds in Canada and commit to achieving net zero emissions.

“OMERS manages the investments of municipal employees across Ontario, and municipalities are at the forefront of climate action in many cases. Most municipalities now have strong climate plans and they are implementing them, and they are also on the front line of impacts, so it is time for the pension fund manager of these employees to also align the strategy with the same goals. So it’s really good to see, ”he said.

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