Edmonton – Last week, the Alberta Investment Management Corporation (AIMCo) outlined its approach to climate investing.
In a report issued by the corporation, AIMCo acknowledges “the potential risks that climate change poses for our portfolios and are working toward ensuring they are resilient in an ever-changing world.”
“Where there are risks, there are also opportunities.” AIMCo says its investment strategy compels it to seek investment opportunities created as the world transitions to a low carbon economy.
As of Dec. 31, 2022, AIMCo says it has stakes valued at over $16 billion in green investments across its asset classes. As of Dec. 31, 2023, 48 per cent of AIMCo’s direct core infrastructure portfolio assets under management have made net-zero commitments.
“AIMCo has been strategically evaluating climate change risks and opportunities for the last decade and the organization has a strong track record of making investments in the energy transition space,” said Marlene Puffer, Chief Investment Officer, AIMCo. She adds “Our climate approach provides important transparency around how we consider climate in our investments and how we will, over the long run, help reduce emissions.”
According to a press release issued by AIMCO, the corporation’s climate approach includes the introduction of a climate taxonomy that evaluates and classifies the energy transition readiness and carbon intensity of existing and new investments. AIMCo says this tool helps the investment teams analyze climate risk within client portfolios, as well as measure and improve total portfolio transition readiness.
AIMCo also introduced its Energy Transition Opportunities Pool (ETOP), which is a $1 billion fund dedicated to investing in the global energy transition and decarbonization sectors.
The initial $1 billion in AIMCo’s ETOP represents new capital. AIMCo says the investments made through ETOP will be in addition to AIMCo’s other climate-related investments across asset classes. Many of AIMCo’s clients have allocated funds to the new pool, which will offer them exposure to a variety of energy transition opportunities and themes, including:
- Industrial decarbonization, carbon capture and sequestration
- Sustainable solutions and renewable fuels
- Low-carbon renewable energy production and related technologies
- Electrification, storage and energy efficiency
AIMCo’s says its belief is rooted in supporting the energy transition. However, the corporation is opting to remain invested in industries with notable carbon footprints. AIMCo says it believes divesting, cutting funding, or making the energy transition more expensive for carbon-intense industries causes a lack of real-world progress
“We are gratified by our clients’ commitment both to the new pool and to our shared objective of supporting and benefiting from energy transition and decarbonization opportunities,” said Ben Hawkins, Executive Managing Director, Head of Infrastructure & Renewable Resources.