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HOOPP

Climate Change

Climate Change

Climate change poses one of the most urgent and pressing systemic challenges of our time. It presents a unique risk that requires coordinated action from governments, corporations, individuals and institutional investors like HOOPP. While the issue of climate change is complicated and constantly evolving, it can no longer be approached solely as a long-term issue.

HOOPP recognizes the risks presented by climate change, and that they can impact and influence our investment strategy through:

  • physical impacts such as increased risk of flooding and other severe weather events, or changes in agricultural growing seasons
  • transition impacts such as policy interventions, technological innovations and changes in consumer preferences

These impacts can affect individual companies, entire sectors, geographies and economies.

We acknowledge that climate change can result in both risks and, in some cases, opportunities for HOOPP. Our Board of Trustees and executive management team have made climate change a priority. You can read more about the steps we are taking below.

How HOOPP is addressing climate change 

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Committing to net zero

HOOPP is committed to achieving net-zero carbon emissions in our portfolio by 2050. This commitment is an important element in our ongoing focus on sustainable investing. The work required to meet this goal is ongoing and there is more to come, but our journey is already well under way.

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Analyzing climate change scenarios

Climate scenario analysis is an evolving global field of expertise that helps HOOPP determine the potential business impacts of climate-related risks and opportunities on our Fund. In 2021, HOOPP:

  • initiated climate scenario analysis of the Fund, to determine the potential impacts on our investments of multiple climate change scenarios
  • partnered with a group of global investors to pilot a climate analytics tool that can model the effects of climate change, both physical and transition impacts, on a company relative to its peers

We will continue to monitor the development of standardized scenarios and methodologies so we can build upon this initial phase of work.

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Investing in climate solutions

Transitioning to a greener economy requires significant investment from many stakeholders. There are opportunities for HOOPP to contribute towards this transition, while continuing to provide attractive risk-adjusted returns for our members. With the knowledge that our investments can have a real and direct impact, HOOPP is taking action. Here are some examples:

  • The implementation of a $1 billion portfolio allocation that is focused on carbon-efficient companies, clean energy and other climate change solutions.
  • Continuing to invest in green and sustainable development bonds, which provide funding for projects such as clean transportation, clean energy and technology, energy efficiency and conservation, and others. We had approximately $550 million invested at the end of 2021.
  • Continuing to invest in climate-resilient and clean energy infrastructure, with approximately $398 million currently invested.
  • Continuing to pursue an active energy transition strategy within our public equities portfolio. We currently have approximately $450 million invested in climate solutions and the transition to a net-zero future.
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Driving change through active stewardship

Being a responsible steward of our investments is a key pillar of our sustainable investing framework and how we address climate change. We have taken steps to further strengthen our stewardship, which you can read about below.

Climate Engagement Canada logo

HOOPP is a founding member of Climate Engagement Canada (CEC). CEC is a collaborative initiative focused on driving climate action at Canadian companies that will lead to reduced emissions and decarbonization. HOOPP is a member of the Steering Committee of CEC, which is expected to begin engaging with Canada’s top-emitting companies in 2022.

Investor Agenda logo

HOOPP is a signatory to the Global Investor Statement to Governments on the Climate Crisis. This is a call-to-action for governments to implement policies that would limit global warming to 1.5 degrees Celsius and support the decarbonization of the economy. HOOPP values clear and consistent climate policies, which are key to decreasing climate risk while creating opportunities for investment.

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Expanding our climate disclosures

In 2008, HOOPP became the first Canadian pension plan to release a carbon emission policy for our real estate portfolio. At the same time, we also began measuring carbon emissions for our real estate holdings and have since expanded this to our public equities portfolio.

We continue to expand on our climate-related disclosures. Since 2020, we have followed the Task Force on Climate-related Financial Disclosures (TCFD) framework for the reporting of climate-related financial information. The TCFD framework allows for more clear, comprehensive, and high-quality information on the impacts of climate change. Read more about our TCFD-aligned disclosures.

Our approach to divestment

HOOPP believes that addressing climate change requires real-world results, and that simply reducing the carbon footprint of our investment portfolio does not necessarily translate into lower emissions in the real economy.

We believe that we are better able to effect corporate change by having a seat at the table as an investor and helping to shape corporate priorities. We are well positioned to influence change by working with the companies we invest in, and we believe this approach is in the best interests of our members.

We view divestment as a final option, after having exhausted all efforts at dialogue. Divesting too soon can encourage companies to seek funding from sources that may be much less concerned with climate change than HOOPP is.

By urging and encouraging corporations to develop credible decarbonization plans, and by voting in support of climate-related proposals, HOOPP can and does influence corporate behaviour. In the long term, remaining an active investor in companies can lead to real-world impacts while enhancing value for our members.

Looking ahead

There is more work to be done in addressing climate change. Looking ahead, we are continuing to build out our climate-related initiatives and plans, including:

  • expanding the coverage of our portfolio carbon footprint to other asset classes in addition to real estate and public equities
  • continuing to examine tools that allow us to analyze different climate-related scenarios
  • scaling-up our engagements and voting action on climate issues
  • continued work to achieve net-zero carbon emissions in our portfolio by 2050
This document provides a simplified overview of HOOPP's benefits based on the terms of the HOOPP Plan Text at the time of publication. From time to time, HOOPP may amend the HOOPP Plan Text. In cases where the information provided in this document differs from that contained in the HOOPP Plan Text, the HOOPP Plan Text will govern. More details, including the full HOOPP Plan Text and a complete description of the Plan and its benefits, can be found on hoopp.com.