Impact on the asset allocation mix from pursuing a reduction in portfolio carbon intensity
Global Investment Insights
with Deb Barnes, Managing Director, Capital Markets Risk, OMERS (Toronto)
Deb joined OMERS Capital Markets in December 2020 as Managing Director, Capital Markets Risk.
Previously, Deb spent 15 years at Queensland Investment Corporation (QIC). She began her career in Risk in 2016 after 10 years in QIC’s Global Fixed Income team. From 2011 to 2015 Deb led QIC’s Global Trading function from London which executed trades across fixed income, currency, equity and commodity markets.
Although Deb’s current role at OMERS centres around risk management, which involves a lot of quantitative modelling and analysis, a large part of the role is about people and relationships. Being six months into her new role, Deb highlighted that a key focus for her is spending time meeting people across the organisation.
“A key element of my role is to act as a connector within the business to ensure decisions are being made with all the relevant facts. This requires us to have open and substantive conversations, which at times, can become a melting pot of divergent viewpoints. Having strong and trusted interpersonal relationships is therefore critical to ensure we can source the best ideas from across the organisation and that people feel safe to put their views forward.
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The team I lead were born in 9 countries, speak 15 languages and program in 13 languages.
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I’m also focused on leveraging the team’s diversity and finding opportunities for everyone to showcase their talent. The team I lead were born in 9 countries, speak 15 languages and program in 13 languages. While these statistics are fantastic, it becomes particularly powerful when combined with the team’s alignment on purpose. Which is to ensure our conversations involve a variety of perspectives, but that those conversations are always rooted in identifying the best outcomes for OMERS’ 525,000+ members”, Deb explained.
This said, Deb believes that attaining best outcomes is also dependant upon the mental well-being of people, which enables them to live and perform at their full potential.
“The last 12-18 months has seen many people experience COVID-related stress, anxiety and burnout. While I’m hopeful the global vaccine roll-out will provide an effective safeguard against COVID, I expect we will continue to live with the virus in our communities for years to come. Therefore, if I were to advocate for one major change within our industry, it would be to increase the focus on mental health and resiliency”, Deb highlighted.
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Many people have experienced COVID-related stress, if I were to advocate for one major change within our industry, it would be to increase the focus on mental health and resiliency.
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Many studies have shown emotional resilience can be linked to having a sense of meaning and purpose.
“Working at OMERS, that sense of purpose is easily fulfilled by the organisation’s core mission. We need to think outside our own circles though and start building this skill within our children. Like everything, mental resilience takes practice. A very powerful portrayal of the relationship between resilience and purpose is within Viktor Frankl’s book, Man’s Search for Meaning. I believe we have so much to learn from Frankl’s story and I would advocate for having his book incorporated into our education curriculum”, Deb purported.
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OMERS is finding opportunities to invest in, and partner with well-run organisations who share our sustainable and environmentally responsible mindset.
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With regard to the future of investing, Deb sees the intersection of technology with other industries bringing about many innovative and new investing ideas that can help address global issues such as decarbonisation.
Climate change is one of the most pressing issues of our time and represents both significant risk and opportunities. “Across the organisation, OMERS is finding opportunities to invest in, and partner with well-run organisations who share our sustainable and environmentally responsible mindset”, Deb stated.
She continued, “we have also recently announced a commitment to reduce the carbon intensity within our portfolios by 20%, by 2025. While our targets are ambitious, we also recognise the need to transition in a measured and thoughtful manner to ensure we continue to deliver on the pension promise. As the Chair of OMERS Climate Risk Working Group, I’ll have the opportunity to monitor our progress firsthand, which is very exciting.”
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We have recently announced a commitment to reduce the carbon intensity within our portfolios by 20%, by 2025.
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While this transition will be gradual, impacting the fund’s portfolio composition, at the end of 2020, OMERS’ held about 23% of the portfolio in fixed income, 44% in equities (public and private) and 33% in real assets (infrastructure and real estate). That these are generally within the range of OMERS’ asset mix targets, which are typically reviewed every three years, according to Deb.
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At the end of 2020, OMERS’ held about 23% of the portfolio in fixed income, 44% in equities (public and private) and 33% in real assets (infrastructure and real estate).
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Deb left us with some reflections on her career to date, a journey which has not been a typical one, that has led her to live in Australia, London and now Canada.
“Over the years I’ve learned many lessons and have been constantly reminded that learning is a lifelong pursuit. My best advice for anyone starting or reconsidering their career is:
Seek meaning in the work you do;
Recognise that success depends on your willingness to take risk (perhaps ironic coming from a risk professional); and,
Understand that trusted relationships are the foundation of everything.
It was the combination of all three factors that led me to accept the role at OMERS and move my family to Canada amidst a global pandemic.
My father was a fireman, so I deeply appreciate the importance of providing secure and sustainable pensions to those who spent their lives serving our community. Throughout my career I’ve made various unconventional decisions that made my pathway to OMERS look more like a jungle gym than a “corporate ladder”. And it’s mainly been through the lateral moves where I’ve found the biggest opportunities to grow. While at times it felt overwhelming being in a new environment, those moments also taught me the value of knowing when I don’t have the answer, the importance of leveraging the team’s expertise and the right to always ask questions”, Deb shared.
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Learning is a lifelong pursuit.
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Disclaimer
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