Katharine Preston highlights that climate is an integral component of OMERS' investment strategy, rather than a compromise.
In a significant stride towards a sustainable future, OMERS, the Canadian defined benefit pension fund, has announced ambitious plans to invest $30 billion in "green investments" by 2030. This move is part of OMERS' overall ambition to make its portfolio and operations net zero by 2050.
OMERS' clean energy investments are primarily focused on private markets, including real estate, clean technology, renewables, and notably, nuclear energy. The fund has earmarked C$3 billion to a transition sleeve for investing in high-carbon assets in need of funding for targeted decarbonization.
One of OMERS' key investments is its commitment to Bruce Power, Canada's only private sector nuclear generator, which annually produces 30% of Ontario's power. The fund continues to invest in nuclear energy as part of its decarbonization strategy, despite ongoing challenges around nuclear waste, which are being managed by the organizations involved.
The classification of nuclear energy as "green" has been a topic of debate, but it is now considered green through the EU Sustainable Finance taxonomy and the market's willingness to purchase green bonds issued by nuclear energy companies. OMERS' investments in nuclear energy are a key part of its decarbonization story and local investment strategy.
Katharine Preston, vice president of sustainable investing at OMERS, has stated that the fund has already committed $21 billion to "green investments". OMERS has also reported a 52% carbon intensity reduction in its portfolio.
In addition to nuclear energy, OMERS' investments in climate solutions include a C$3 billion allocation to a transition sleeve. The term "green" in OMERS' investments is defined using the International Capital Markets Association's green bond principles.
OMERS has issued two sustainable bonds since 2022, with the net proceeds allocated to eligible green or social assets. The evolution in views on nuclear energy's role in decarbonization has been observed over a two-to-three-year period, with a significant shift from uncertain to a much stronger view of its importance.
Selections for assets to make up the transition sleeve portfolio are currently a "work in progress". However, it is clear that OMERS is committed to playing a significant role in the global transition to a greener, more sustainable future.
