Shift towards Investment in Inflation-Resistant and Climate-Focused Assets, according to Barbara Zvan of UPP.
The University of Toronto Pension Plan (UPP) has established a reputation for its long-term investment strategy, focusing on private markets, risk-aware sustainable growth, and Canadian infrastructure. Launched in 2021, this Canadian pension plan serves over 40,000 members across five Ontario universities and 14 sector organizations.
UPP's approach to investments is characterised by a strong emphasis on purpose and risk, with a commitment to low to no fees by selectively investing in niche strategies. The pension plan actively monitors geopolitical risks, including US policy impacts, and integrates scenario stress testing into its investment decision-making.
In line with its commitment to sustainability, UPP views climate risk as a material financial issue. The pension plan actively engages with companies to promote credible emissions reduction strategies and responsible investing practices. Barbara Zvan, who has led UPP as president and CEO since its inception, brings nearly 25 years of experience from Ontario Teachers' Pension Plan to the table.
UPP has pledged C$1.2bn for climate solutions by 2030, with more than half already committed (C$658m). The pension plan is prioritizing assets that offer inflation protection and has halved its portfolio's GHG emissions intensity since 2021. Transitioning to a more sustainable portfolio is a slow process, but UPP remains optimistic, expressing "cautious optimism" about Canada's climate stance following Mark Carney's election.
UPP's investment portfolio is divided into three categories: return-enhancing (equities and private markets), inflation-sensitive (infrastructure and real estate), and interest rate-sensitive (fixed income). The pension plan has reduced the number of managers it works with while increasing its interest rate sensitivity to reflect the higher-rate environment.
UPP's climate commitment involves shareholder advocacy for transparent and credible emissions reduction aligned with internationally recognized standards. The pension plan has filed proposals urging companies like Alimentation Couche-Tard to disclose clear, internationally recognized emissions reduction targets to safeguard long-term shareholder value.
UPP has made co-investments in infrastructure with Arjun Infrastructure Partners and Copenhagen Infrastructure Partners. The pension plan has also allocated private credit to Arrow Global Group and private equity to Kohlberg & Company. UPP invests in public markets with managers such as Impactive Capital, Whitebox, Ashmere, and Episteme Capital Partners.
Despite encouraging progress across various asset classes, except for hedge funds, UPP faces challenges in reducing emissions in private markets, fixed income, and infrastructure. The pension plan relies heavily on managers for data, insights, and execution in its investment decisions.
UPP's strategy has proven effective, with the pension plan fully funded and reporting an annual net return of 10.3% as of 2024. The pension plan's focus on climate solutions, sustainable growth, and Canadian infrastructure has positioned it as a leader in the industry, with UPP ranking comparatively high on Shift's Annual Scorecard, measuring climate commitments of Canadian pension funds.
Sources: - Top1000Funds.com, 2025 - Benefits Canada, 2025 - MyUPP.ca, 2025 - Various news articles and reports from 2021 to 2024
The University of Toronto Pension Plan (UPP) invests in niche strategies that prioritize climate solutions and environmental-science projects, aligning with its commitment to sustainability. While UPP engages in shareholder advocacy to ensure credible emissions reduction strategies, it also invests in the finance sector, partnering with companies like Impactive Capital and Kohlberg & Company for private equity.
