Caisse, Ontario Teachers' unveil G7 investor alliance on climate change, infrastructure
A pair of Canadian pension funds and Prime Minister Justin Trudeau’s government announced an institutional investors’ “leadership initiative” aimed at boosting global efforts on climate change, infrastructure and gender equality.
Michael Sabia, chief executive officer at the Caisse de Dépôt et Placement du Québec, and Ron Mock, chief executive officer at the Ontario Teachers’ Pension Plan Board, unveiled the initiative in Toronto on Wednesday along with Finance Minister Bill Morneau and Environment Minister Catherine McKenna. The group will enhance expertise in infrastructure finance and development in emerging economies, boost roles of women in finance and speed up implementation of climate-related risk disclosure, the Caisse said.
The world needs to invest $3.3 trillion (US$2.6 trillion) in infrastructure annually through 2030 to keep pace with growth, creating an “infrastructure gap” that is particularly critical in capital markets, the Caisse said in a statement. The groups will launch an infrastructure fellowship program, develop diversity policies and set up an advisory committee on climate disclosure.
“This is the start of something that we think is a bit different,” Sabia said in Toronto. The group will focus on collaboration to “take on some big issues,” he said. While the core role is to produce returns, he said “as long-term investors, we know that our returns are affected by the health and strength of countries where we invest.”
The Caisse and Ontario Teachers' will be joined by partner institutions including Alberta Investment Management Co., Germany’s Allianz SE, London-based Aviva and the California Public Employees’ Retirement System, according to the Caisse statement.
The investors will “promote gender diversity in capital markets, create an infrastructure fellowship program to help develop expertise in emerging and developing economies, and take steps to better recognize and report on the financial risks associated with climate change,” the government said in a statement.
Capital is not “properly aligned with the principles of sustainable development, and we need to change that,” McKenna said Wednesday. McKenna and Sabia lauded recommendations made by the Task Force on Climate-related Financial Disclosures, which was spearheaded by Bank of England Governor Mark Carney, and chaired by Michael Bloomberg, founder of Bloomberg LP.
Other members of the group include Banca Generali S.p.A., Natixis Investment Managers, the Ontario Municipal Employees Retirement System, the Ontario Public Service Employees Union Pension Plan Trust Fund and the Netherlands’ Stichting Pensioenfonds Zorg & Welzijn fund, known as PGGM, according to the Caisse statement.
Those institutions collectively manage more than $6 trillion, the Caisse said. The groups didn’t pledge any specific investment or new fund. Trudeau will host G7 leaders later this week in Quebec, with a dispute over U.S. metals tariffs set to dominate the agenda.