The plan’s strategy to address climate risk

Our board believes that climate change is a long-term material systemic risk to the plan as well as an investment opportunity. Although the timing and extent of the effects of climate change are uncertain, actions to reduce greenhouse gas emissions can directly and indirectly benefit the plan, including through:

• investor stewardship
• the selection of assets
• advocating for appropriate public policies.

Net-zero goal

In 2022, our board set a goal to reach a net-zero portfolio by 2050, reducing the carbon intensity of the portfolio 55 per cent by 2030. Our board is committed to explore investing in a manner in line with the Paris Agreement.

Climate actions

Our climate change actions also include:

• Climate scenario analysis/modelling to understand climate change impacts on the portfolio
• Measuring and quantifying carbon exposure
• Supporting BCI in exploring sustainable investment opportunities (e.g., low carbon, green)
• Advocating for carbon pricing
• Educating trustees on climate change concepts and associated investment risks and opportunities

Disclosure

The MPP board was one of the first large pension plans in Canada to voluntarily report climate-related financial disclosures, starting in our 2019 Annual Report. The plan provided these disclosures in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

In 2023, the International Sustainability Standards Board (ISSB) developed a universal set of sustainability reporting standards, including one for climate-related financial disclosures. This is called the International Financial Reporting Standards (IFRS) S2 standard and it builds on the TCFD recommendations. The IFRS standards are intended to disclose how climate-related risks and opportunities are evaluated, managed and integrated in planning and decision making.

The IFRS S2 standard is structured on the same four disclosure areas as the TCFD:

• Governance
• Strategy
• Risk management
• Metrics and targets

Disclosures are included in the plan’s Annual Report and explain:

• The board’s oversight of climate-related risks and opportunities
• Short-, medium- and long-term climate opportunities and risks
• The process for identifying and assessing climate-related risks and the board’s process for managing these risks
• The level of greenhouse gas emissions and the metrics used to assess the climate opportunities and risks