As world leaders converge at this week’s climate summit in Madrid to debate how best to shift to a net zero-economy, Michael Sabia is leaving the helm of Canada’s second-largest pension plan having firmly placed Quebec’s retirement savings at the forefront of the global movement for low-carbon investing.

Sabia, who recently announced he’s stepping down from the Caisse de dépôt et placement du Québec (CDPQ) in early 2020, ushered in a fundamental change in how the $326 billion Quebec pension fund treats the climate-related risks and opportunities that are embedded in the 21st-century global economy.

In doing so, CDPQ is challenging the traditional view of pension managers and other institutional investors. Despite the looming impacts of climate change, many fund managers operate with a view that their fiduciary obligation limits their ability to consider environmental, social and governance factors in investment decisions to those that are clearly quantifiable as short-term, material risks. In contrast, CDPQ is part of an international movement to put the climate crisis at the centre of the investment process.

That effort got a boost this week when the United Nations named outgoing Bank of England Governor Mark Carney as special envoy on climate action and finance, and Carney noted that “investing for a net zero world must go mainstream.”

Carney’s appointment comes amid new warnings about the urgency of climate actions, as the United Nations Environment Programme indicates that the costs of averting climate disaster are mounting exponentially due to widespread foot-dragging.

CDPQ made its big stand two years ago. In 2017, Sabia and his team set ambitious targets to ratchet up investment in low-carbon assets by 50 per cent by the end of 2020. They have since raised that goal to 80 per cent – for an increase of $15 billion. CDPQ also aims to reduce the greenhouse-gas intensity of its portfolio by 25 per cent by 2025.

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