Geared toward institutional and HNW investors, funds aim to support Canadian and international firms on net-zero emissions path
Canadian high-net-worth investors who want to get behind the global transition to a low-carbon energy economy now have a new option to do so.
Addenda Capital, a privately owned investment management firm based in Montreal, has launched two new investment funds to support companies as they take steps to cut their greenhouse gas emissions to help create a net-zero emissions society by 2050.
Both actively managed, the Addenda Climate Transition Canadian Equity Pooled Fund and the Addenda Climate Transition International Equity Pooled Fund invest in stocks of public companies in Canada and abroad, respectively.
“These funds are the result of an in-depth reflection among our teams who worked hard to define the true and tangible role that the financial sector must play in the transition,” said Addenda Capital President and CEO Roger Beauchemin.
Aside from investing in companies that have mapped out their road to transition, the strategy aims to engage with companies regularly and encourage them as they pursue their carbon objectives. The selection criteria that directs its portfolio holdings will also strengthen over time.
“We view our approach as more constructive than divestment,” Beauchemin said. “We aim to support and encourage companies in their efforts to reduce GHGs in this massive shift that is necessary to transform the Canadian economy and our society for generations to come.”
Recently, the Government of Canada unveiled a new GHG emissions target of 40% to 45% below 2005 levels by 2030. Previously, the target was set at 30% as part of Canada’s Nationally Determined Contribution under the Paris Agreement. Based on federal data, the three sectors accounting for the largest share of GHG emissions in 2019 were oil and gas (26% of overall emissions), transportation (25%), and buildings (12%).
Co-owned by Co-operators Financial Services and by employees, Addenda Capital is a signatory of the United Nations’ Principles for Responsible Investment, the Montreal Carbon Pledge, and the Canadian Investor Statement on Diversity and Inclusion. The firm also has a long track record of integrating ESG analysis into its investment process.
“In our view, sustainable investment is the pillar of long-term value creation for our clients,” Beauchemin said. “The investment solutions that we offer are intimately linked to an approach we apply throughout our work: the integration of environmental, social and governance (ESG) factors in decision-making has been part of our process for a long time.
“As leaders in sustainable investing, we favour this strategy to generate compelling financial returns while making the right choices for generations of Canadians to come.”