Wind turbines in Austria. Ontario Teachers’ Pension Plan is aiming to double its portfolio of assets that are 'aligned' with a net-zero transition by 2030 but is dropping its emissions target.LEONHARD FOEGER/Reuters
Ontario Teachers’ Pension Plan is revamping its approach to climate investing, aiming to double its portfolio of assets that are “aligned” with a net-zero transition by 2030, but dropping an emissions target that it set five years ago.
The $270-billion pension plan announced a new goal to reach $70-billion of investments in climate-friendly assets over the next four years, from $35-billion currently. Teachers manages pensions for about 343,000 members in Ontario, including working and retired teachers.
The new framework would count investments in privately owned companies that contribute directly to climate solutions with green products, services or technology, as well as large emitters that have credible plans to decarbonize. Companies that have expanded exploration, extraction or refining of fossil fuels since 2023 will be excluded.
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Teachers is the latest major financial player to rethink climate-related policies and accounting, years after a global rush to institute risk-management measures related to carbon emissions and invest in decarbonization.
Canada Pension Plan Investment Board also changed its approach, abandoning its net-zero carbon emissions target last year, citing legal uncertainty.
Banking and asset-management arms of the Glasgow Financial Alliance for Net Zero, a group that was spearheaded by Mark Carney before he became Prime Minister, suspended operations after numerous members quit the organizations fearing a growing backlash, especially in the United States.
Teachers, however, said it revised its climate-related investment strategies after achieving its intensity-based emission targets ahead of schedule.
Teachers had previously pledged to cut the intensity of carbon emissions across its portfolio by 45 per cent by 2025, compared with 2019 levels. The emissions intensity of its investments fell by 49 per cent at the end of 2024.
Now, Teachers will “retire” its earlier target to reduce the intensity of emissions by 67 per cent by 2030.
“This isn’t essentially a new strategy. It’s a development of a strategy we’ve been involved in for five years in terms of trying to think about energy transition and climate solutions,” chief executive officer Jo Taylor said in an interview.
“We’re still on a path to be aligned with net zero in 2050, so we’ve not given up on that objective,” he added.
With its new approach, Teachers said that the emissions intensity of its portfolio could rise again in the near term. But the fund’s leaders are betting that by focusing on private assets that can credibly contribute to decarbonization, including heavy emitters that are working to reduce their carbon footprint, Teachers can have a larger positive impact over the long run.
Ontario Teachers' Pension Plan CEO Jo Taylor at the 2025 U.S.-Canada Summit in Toronto in October, 2025.Sammy Kogan/The Globe and Mail
Intensity-based targets have the advantage of being easy to understand, measure and compare across different types of assets. But focusing on those targets put the emphasis on a single, portfolio-wide number that could fluctuate as Teachers buys and sells assets.
Teachers felt that focusing on private assets, where the plan has significant ownership stakes in businesses that give it influence and a chance to work directly with senior management to make improvements, would be a better approach.
“Rather than change the composition of a portfolio to meet certain targets ... we are really trying to focus now on areas where we have good line of sight and control to make a difference,” Mr. Taylor said.
In its 2025 Canadian Pension Climate Report Card, Shift Action for Pension Wealth and Planet Health gave Teachers a mark of B-. The environmental advocacy group said the retirement fund had drifted from its previous leadership position as some of its peers outlined more ambitious strategies. It also said that Teachers had not made a public commitment to exclude fossil fuels.
Teachers said its new climate framework has been reviewed and endorsed by the Climate Bonds initiative, a London-based non-governmental organization that sets and certifies standards for green and sustainable debt.
The sustainable investing staff at the fund works closely with the teams that do deals and work to improve companies in the portfolio, said Anna Murray, global head of sustainable investing. One example is Jasper Farms, a major Australian producer of avocados that Teachers acquired in 2017.
“We worked with their teams on determining what type of heat stress would impact yields,” Ms. Murray said. “As a result, they implemented decades worth of adaptation planning.”
The revamped strategy is also designed to target investments that earn strong returns for pensioners, while still pursuing decarbonization. So far, Mr. Taylor said, the plan’s gains on climate-aligned assets have been “consistent” with its expectations across the portfolio.
“Every investment we make and everything that will fall into this criteria is done with a very clear lens of: We’re here to make money for our members,” he said.