One of the leaders of this year’s assessment is Ontario Teachers’ Pension Plan (OTPP), which achieved for the first time a perfect score and is usually cited as an example of best practices globally.

OTPP sets high governance standards: it is overseen by an independent Board that ensures a commercial approach and is sponsored jointly by the Government of Ontario and Ontario Teachers’ Federation.

OTPP is also a champion in sustainability: its portfolio has reduced its carbon intensity by almost half (from tCO2e/$ million 47 to 24) and its carbon emissions by 16% (from ktCO2e 6,327 to 5,343) from 2019 to 2024.

Lastly, OTPP is focused on long-term resilience, by maintaining a well-diversified, resilient asset mix, as well as selectively taking active risk where value can be added.

We had the pleasure of discussing with Gillian Brown, CIO Public & Private Investments (“GB”) and Stephen McLennan, CIO Asset Allocation (“SM”) the keys for OTPP’s success, and the future plans of the institution.

[GSWF] Canada prides itself with one of the world’s most advanced pension systems and investment models. How do you see the industry and the Maple 8 funds evolving in the years to come?

[OTPP-GB] The Canadian model of pension management – which OTPP helped establish in 1990 – has consistently evolved and we expect it will continue to do so. While we cannot predict what will happen in the future, we are well placed to evolve alongside market shifts because of our healthy funding surplus, strong internal investment teams, ability to invest across geographies and asset classes, and flexible capital.

[GSWF] OTPP had a great 2024, with net assets peaking at CAD 266 billion, a 9.4% return, and 110% funding level. What do you expect for calendar year 2025, given the current market volatility?

[OTPP-GB] The first half of 2025 has been a volatile and challenging time for institutional investors. The road ahead for the global economy and financial markets is uncertain, with the distribution of potential economic and asset market outcomes still wide and in large part dependent on global political developments. Private asset markets, which Ontario Teachers’ have significant exposure to, continue to have low activity levels as buyers and sellers struggle to agree on valuations, although we have had some successful asset sales in recent months. We anticipate the remainder of the year will continue to be challenging, so we are focused on building a resilient portfolio that will be well prepared for shocks and opportunities.

[GSWF] In the past five years, the weight of private markets, especially private equity, infrastructure and credit, has increased significantly. How do you see the portfolio evolving in the next five years?

[OTPP-SM] OTPP optimizes returns by evaluating the total fund, distributing capital across asset classes, and adjusting the asset mix strategically and agilely to reflect market conditions. In the past five years we grew certain asset classes, particularly infrastructure and credit, as we felt they offered some additional cover for inflationary environments (infrastructure) and attractive risk-adjusted returns (both). We will continue to actively manage the asset mix to earn stable returns and seize attractive risk-adjusted opportunities to keep the plan fully funded.

[GSWF] Similarly, the weight of your Canadian portfolio has dropped from 54% in 2016 to 36% in 2024. How do you see your global mix adapting to the increasingly fragmented macro scenario?

[OTPP-SM] Our investment mandate is a global one and we invest in jurisdictions and asset classes that we believe will result in the best risk-adjusted returns for plan beneficiaries. That being said, we like investing in Canada as it offers some compelling benefits for OTPP, most significantly it takes currency risk out of the equation (our liabilities are in Canadian dollars). We also know the market well so are well-positioned to invest here at home when we find attractive opportunities. While we intend to continue investing globally to benefit from diversification, we do not have a target geographic mix for the portfolio and go where the best risk-adjusted opportunities are.

[GSWF] Let’s now look at the three different aspects of the GSR Scoreboard for OTPP:

Governance (“G”):

[GSWF] OTPP maintains an independent Board of Directors that is appointed by the plan sponsors. Can you please elaborate further on the independence of your governance structure?

[OTPP-GB] OTPP’s professional and independent board is a key ingredient in our success over the last 35 years. Our board members are required to solely act in the best interest of plan beneficiaries. This singular focus – independent of our two sponsors (the Government of Ontario and Ontario Teachers’ Federation) – ensures the commercial basis to keep the plan fully funded and support our mission of delivering retirement security to members over the long run.

[GSWF] In 2024, OTPP absorbed Cadillac’s global portfolio and teams, formed a Portfolio Solutions group, and split the CIO function in two. How has the transition to the new management team been?

[OTPP-SM] Reflecting on the past year, three key things stand out:

1.It was a year of significant volatility, which created an unpredictable and muted investment environment,

2.Our portfolio’s resilience by design played a crucial role in delivering strong performance in 2024, and.

3.It was a year of growth and learning in our new roles and both Gillian and I had the opportunity to collaborate across teams at our global offices, deepening our insights and understanding.

The support from our teams was invaluable and we saw strong capabilities across the organization broadly.

[OTPP-GB] We undertook some significant changes last year and established two new investment departments:

-We formed an in-house real estate group, which had an active first year, shaping a revised strategy and exiting some non-core holdings. We are confident that the new strategic direction will deliver success for our real estate asset class and help us build a more geographically and sectoral balanced real estate portfolio over time.

-We also formed the Portfolio Solutions Group, a new team that aims to elevate and align our value creation efforts across the portfolio. The group is accountable for monitoring and enhancing private asset performance, improving best-practice sharing across the fund and providing more centralized value creation oversight.

We believe that value creation is essential to drive returns in today’s challenging environment and, as a result, have been even more intentional in driving improved business performance through focused value creation programs.

Sustainability (“S”):

[GSWF] OTPP has committed to net zero by 2050, but not joined the Paris Aligned Asset Owners or the Net Zero Asset Owner Alliance, or imposed specific exclusions on fossil fuels – is this by design?

[OTPP-SM] Yes, that is by design: we are committed to an approach grounded in credible methodologies and informed by the findings of leading alliances and industry groups. That said, we prefer to retain the flexibility to adopt practices that make sense for a global direct investor like us, particularly one with a strong bias toward private markets. Our exclusion approach is to drive performance and positive outcomes by leveraging our role as an active and engaged owner. We believe divestment simply passes the asset to another investor who may not share our standards or long-term perspective.

[GSWF] The Finance Trust is a prolific debt issuer and is consistently rated at AAA / Aa1, a few notches above the Province of Ontario – are there any new issuances planned during 2025?

[OTPP-SM] Ontario Teachers’ Finance Trust (OTFT) is an established issuer, with outstanding issuances every year since 2017 across major currencies including CAD, USD, EUR, and GBP. It has also been a Green Bond issuer since 2020. As of December 31, 2024, OTFT had CA$ 28.5 billion in outstanding term debt. Most recently, in May 2025, OTFT issued a EUR 1 billion Green Bond. OTFT will continue to be active in the market to support the fund’s investment program, helping to achieve an optimal risk-return profile and manage total fund liquidity.

Resilience (“R”):

[GSWF] OTPP has now over 1,300 employees in 9 global offices to manage over 80% of its portfolio in-house. Have you reached your optimal organizational size, or are you planning any other office?

[OTPP-SM] OTPP has a strong existing global footprint and over 450 investment professionals investing in key regions globally. Earlier this year, we announced that we would close our Hong Kong office and will be optimizing our footprint in the Asia-Pacific region through our offices in Singapore and Mumbai, where we have teams focused across asset classes and regional markets. We are not currently considering opening any new offices as we feel our existing footprint is optimized for our investment activities.

[GSWF] What main changes have you observed during your tenure at OTPP, and what do you think is still needed to make OTPP a bullet-proof organization from an investment and operational perspective?

[OTPP-GB] First, I’d say the idea of any organization being “bulletproof” is unrealistic. What matters is building a culture and process of continuous learning and improvement. A big part of our resilience comes from maintaining a well-diversified, resilient asset mix as our foundation. On top of that, we selectively take active risk where we’ve demonstrated the ability to add value. What’s key is the discipline to maintain those two components and adjust when needed or as markets evolve. We also work closely with teams across the organization to ensure our operational capabilities remain aligned with and supportive of our investment activities. That alignment is a big part of how we adapt and stay prepared for the future.