OPB’s Approach to Responsible Investing and ESG

IMCO manages pension fund assets on behalf of OPB. IMCO considers all material ESG factors when it manages our investments, including climate-related risks.

At OPB, we expect IMCO to not only integrate ESG considerations in the investment process, but also to influence investee companies through engagement and shareholder voting to improve corporate practices and to avoid investments with problematic ESG issues. We also expect IMCO to consider divesting from investments where insufficient action is taken to address those issues.

OPB and IMCO are aligned in their commitment to Responsible Investing. Together, we believe that companies and investment managers who effectively address ESG issues, including climate change and diversity, equity and inclusion, are better positioned to deliver long-term shareholder value – which benefits pension plan members.”

Chris Kautzky, Chief Investment Officer, OPB

IMCO has made considerable progress embedding ESG across the organization. In 2021, we set a goal to achieve net-zero emissions by 2050 or sooner. We have set clear expectations on ESG with our portfolio companies and external managers through our Proxy Voting Guidelines and ESG due diligence across all asset classes. We drive investor and corporate collaboration on ESG as a founding and Steering Committee member of Climate Engagement Canada, and as a signatory of climate initiatives, including the Paris Aligned Investment Initiative.”

Hyewon Kong, Vice-President, Head of Responsible Investing, IMCO

Building on Our ESG Commitment

ESG is a priority for OPB, starting with the Board and reflected throughout the organization. We are continually working with our partners and peers on improving our ESG practices.

Introduced a new policy for ESG investment issues, with a particular focus on climate change, that was adopted by the Board in 2021

IMCO established a three-year ESG Climate Action Plan and climate change strategy

Through its management of the PSPP, OPB makes a significant social contribution. Providing members with financial security and peace of mind allows them, in turn, to play an important role in the economic health and vitality of their communities.

OPB is also acknowledged as an example of good governance within Ontario’s public sector. The Board seeks to maintain a best-in-class governance model while making sure that OPB can continue to drive innovation and build a strong future for all PSPP stakeholders.

For more on Responsible Investing: ESG issues can impact investment decisions and investment returns. Both OPB and IMCO have developed policies related to ESG and RI, and are committed to continually reviewing, updating and improving their ESG practices and their approach to RI.

Pulse Clean Energy

In October 2021, IMCO closed its 100% acquisition of Pulse Clean Energy (formerly Green Frog Power Ltd), a leading developer, owner and operator of flexible power generation projects in the U.K. At the core of its growth strategy, Pulse is transforming itself into a global owner and operator of utility-scale batteries and a world-class clean energy storage platform.

Brookfield Global Transition Fund

In July 2021, IMCO made a significant commitment to the Brookfield Global Transition Fund, one of the largest funds focused on investing in the global transition to a net-zero economy. The Fund focuses on renewable power sources and leveraging Brookfield’s operating capabilities to increase the scale of clean energy companies while supporting the transformation of carbon-intensive businesses to achieve the goals of the Paris Agreement.

euNetworks Group Limited

Since 2018, IMCO has been an investor in euNetworks, a European bandwidth infrastructure company that owns and operates fibre networks as well as a long-haul network spanning various regions and countries. IMCO has engaged with co-shareholders and the board to elevate the ESG agenda at the company, including integrating regular reporting on ESG topics at board meetings, supporting management’s work on carbon footprinting and deepening the company’s commitment to diversifying its talent base.

VersaCold

Through its board membership, IMCO has collaborated with TorQuest and management to advance various ESG initiatives, such as route and fleet optimization to reduce fuel consumption and recycling waste heat from compressors for underfloor heating. Additionally, as a member of the Compensation Committee, IMCO initiated and advocated for the inclusion of ESG measurements in the compensation program of senior management.

Neuberger Berman

IMCO worked with our external manager, Neuberger Berman Canada ULC (NB), to implement an investment process which resulted in an over 30% reduction in Scope 1 and 2 carbon intensity of the portfolio managed by NB to-date without sacrificing significant potential upward alpha or altering the risk-return and desired factor characteristics of the portfolio. This was achieved by a constrained optimization process where NB considered IMCO’s alpha expectations and carbon emission objectives, reweighted securities in the portfolio and removed five high carbon emitters from the portfolio.