Climate change has emerged as one of the most pressing systemic risks of our time, with far reaching, global, ecological and socio-economic impacts and resulting investment implications. Climate change has been a key ESG focus area for AIMCo since 2015- we issued our ‘Strategic Position on Climate Change’ shortly after COP 21, and publicly endorsed G-7 and G-20 investor statements calling for policy action on climate change. We closely followed the work of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD), contributed to TCFD consultations and publicly supported their recommendations.
As 194 countries attempt to deliver on their respective COP 21 commitments to reduce GHG emissions, AIMCo is doing our part to evaluate climate risks and opportunities, to protect and enhance investment returns for our clients and their beneficiaries— all Albertans.
AIMCo has been monitoring the absolute emissions and emissions intensity of our public equity holdings since 2016. A key AIMCo objective is ‘Doing Business the Right Way’ – we believe it is important to adopt an accounting of the CO₂e emissions of our portfolios that is relevant, comparable, decision-useful and consistent over time. We continue to assess and monitor the CO₂ emissions profile of our equities portfolio relative to the emissions profile of financial benchmarks to analyze the emissions trajectory, identify top company and sector contributors, carbon risk, investment opportunities, degree of alignment with sustainable development scenarios and to meet our TCFD and client reporting obligations.
We have conducted a carbon footprint of our domestic real estate assets and we have adopted key metrics & targets- energy and water efficiency per square ft. & waste diversion from landfill & invest primarily in LEED & BOMA BEST buildings in our domestic real estate portfolio-77% have a green building certification.
As data becomes available or can be proxied, we will expand our carbon footprint analysis to other asset classes. Our processes for identifying climate-related risks and opportunities across asset classes continues to evolve. AIMCo has tested three methodological approaches and finds that each method has validity, with some having more relevance depending on the asset class in scope. Each carbon accounting method (GHG Protocol, Weighted Average Carbon Intensity, Financed Emissions) provides a different view of emissions-related risk which we continue to analyze.
We encourage companies to disclose their GHG emissions and to begin the process of adopting the Financial Stability Board’s Task Force on Climate-related Financial Disclosure (TCFD) recommendations. This will serve to inform their internal business processes and provide quality, relevant disclosure to investors. We are currently working alongside other like-minded investors as part of the Investor Leadership Network (ILN) to tackle a significant challenge in this area — accelerating the implementation of uniform and comparable climate-related disclosures from global corporations and investors alike. This is an important step that we believe will help us make the best investing decisions on behalf of our clients.