Canada’s Caisse-backed Ivanhoe Cambridge Ties Staff Pay to ESG Goals in Zero Emissions Push

Ivanhoe Cambridge, the real estate arm of Canada’s second-largest pension fund, has tied employee and executive remuneration to hitting environmental targets as it commits to cut net carbon emissions to zero by 2040, its CEO said on Tuesday.

Chief Executive Officer Nathalie Palladitcheff said Ivanhoe, which owns 1,100 properties globally, will add C$6 billion ($4.8 billion) in low carbon investments and, as an interim target, reduce carbon intensity by 35% by 2025.

Since January, employee pay at Ivanhoe, including all its executives, has been directly tied to emissions reduction targets, Palladitcheff said.

“The cherry on the cake has got to be the remuneration,” Palladitcheff told Reuters. “If you incentivize the partners on this criteria, (we’re) pretty sure it’s going to happen.”

Ivanhoe, owned by Caisse de dépôt et placement du Québec, currently has 15 employees on its sustainability team and expects to hire more by the end of the year.

Around 50% of Ivanhoe’s buildings already meet its 2025 emissions intensity target, which the company said will help it perform well in future years.

Adam Scott, director of non-profit organization Shift, which monitors Canada’s biggest pensions funds, said some of Ivanhoe’s peers have not disclosed any environmental-linked compensation schemes.

Planet-warming carbon dioxide emissions from buildings and construction hit an all-time high in 2019, the U.N.-backed coalition GlobalABC said in a December report. Together, building operations and construction account for nearly 40% of global energy-related CO2 emissions.

From 2025 Ivanhoe will construct only carbon neutral buildings, helping achieve another 20% of the target. It expects 30% of its net-zero pledge will come from its electricity suppliers decarbonizing their grids.

Ivanhoe said its low-carbon investments have grown by nearly 200% since 2017 to C$14.6 billion as of Dec. 31, 2020, accounting for 24% of its global portfolio.

Ivanhoe plans to enroll more tenants in its voluntary pilot program aimed at reducing their carbon footprint.

The company also said it is testing alternative building solutions, although it has not set targets for construction materials, but it plans to during the next two years. ($1 = 1.2540 Canadian dollars).