British Columbia Investment Management Corporation sets climate-related targets for public markets
VICTORIA, BC, Feb. 19, 2021 /PRNewswire/ - Today, British Columbia Investment Management Corporation (BCI) announces a commitment to five-year climate-related targets for its public markets program. The near-term targets represent a significant step by the leading provider of investment management services to British Columbia's public sector to further benefit from the opportunities and address the risks associated with climate change.
BCI will target a cumulative $5 billion investment in sustainability bonds by 2025 (based on initial participation) and reduce the carbon exposure in its global public equities portfolio by 30 per cent by 2025 (using 2019 as a baseline).
"BCI always works in the best financial interests of our clients. Assessing and managing the opportunities and risks presented by climate change is core to that responsibility. These targets will help ensure our clients benefit from the shift to a low-carbon economy," said Gordon J. Fyfe, BCI's chief executive officer / chief investment officer.
"Importantly, they set concrete near-term goals that will help us track our progress as we continue to champion long-term and sustainable growth."
The setting of these targets represents a carefully considered evolution of the objectives set out in BCI's 2018 Climate Action Plan, and further complements BCI's strategic approach of leveraging environmental, social, and governance (ESG) for both value creation and risk management.
As a growing number of governments, companies, and institutional investors establish strategies to help achieve the Paris Agreement objective of limiting global warming, BCI believes that it is in its clients' best financial interests to set targets that align with this international treaty. The goals are consistent with the guidance of the Task Force on Climate-related Financial Disclosures (TCFD).
"These targets balance ambition with feasibility and provide a clearly defined pathway for BCI to seize on climate-related investment opportunities and reduce the climate transition risk of our public markets portfolio," said Daniel Garant, executive vice president & global head, public markets.
"BCI believes that gradually lowering exposure to carbon-intensive companies and engaging with companies and regulators to adapt to the low-carbon economy will lead to better financial outcomes for our clients."
The commitment marks another milestone in BCI's climate-related work, including becoming a founding signatory to the Principles for Responsible Investment (PRI) in 2006, supporting the TCFD recommendations, actively participating in Climate Action 100+ since 2017, and publishing its Climate Action Plan in 2018.
"BCI is committed to continuously improving and adjusting our approach to climate change to benefit our clients and their investments," said Fyfe.
BCI will report on progress in meeting these targets through its TCFD reporting, on its corporate website, BCI.ca, and in its ESG Annual Report.
About BCI
With $171.3 billion of managed assets as at March 31, 2020, BCI is the leading provider of investment management services to British Columbia's public sector. We generate the investment returns that help our 31 institutional clients build a financially secure future. With our global outlook, we seek investment opportunities that convert savings into productive capital that will meet our clients' risk and return requirements over time. We offer investment options across a range of asset classes: fixed income; public and private equity; infrastructure and renewable resources; real estate and mortgages.
About BCI's Public Markets Program
BCI's public markets program manages a global portfolio of fixed income and public equity investments representing $112.8 billion and totalling 65.9 per cent of BCI's assets under management (as at March 31, 2020). The program invests in Canada, the U.S., and internationally in developed and emerging markets utilizing index and active management strategies. More than 80 per cent of the program's assets are managed internally using a diverse mix of financial instruments.
About BCI's Climate-Related Targets
Fixed Income:
- The investment target of $5 billion builds on BCI's historical participation in sustainability bonds of $887 million (as at December 31, 2020).
- The setting of transition finance targets aligns with best practice on financing the transition and contributing to a net-zero economy.
- The target will help BCI increase allocations to sustainable issuances of interest and leverage our competitive advantage in this space.
Public Equities:
- The 30 per cent reduction target will be measured using Weighted Average Carbon Intensity (WACI) as recommended by the Task Force on Climate-related Financial Disclosures (TCFD).
- The 2019 baseline aligns with best practices among global investors and closely reflects BCI's current investment strategy based on more active, internally managed mandates.
- BCI began measuring and publicly reporting the carbon footprint of the public equities portfolio in our ESG Annual Report in 2017.
SOURCE British Columbia Investment Management Corporation (BCI)
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