REPORT: Gas companies' claim of using hydrogen to extend their business model lacks credibility, signalling major risks for billions in pension investments in gas infrastructure 

New analysis finds nine of Canada’s largest public pension funds are co-owners of companies that collectively operate nearly 350,000 km in gas pipelines globally, raising questions about the stranded asset risk to Canadians’ pensions through declining global gas demand.

Shift: Action for Pension Wealth and Planet Health’s (Shift) January 2025 report, Gaslighting the Energy Transition: Hydrogen cannot prevent investments from putting planet and profits at risk, reveals the exposure of Canadian pension funds to significant financial risks through their multi-billion-dollar investments in gas infrastructure companies facing terminal decline as the energy transition accelerates.  

Gas companies downplay their exposure to growing transition risk by talking up plans to repurpose their infrastructure for hydrogen transport – leading to “hydrogen hype” that oversells the limited role that gas infrastructure and hydrogen can actually play in the energy transition. However, these greenwashed claims do not stand up to due diligence. The report details the intractable financial, physical, technical and political barriers which make hydrogen unsuitable as a climate solution and exposes existing gas infrastructure to significant risk of asset stranding.

Shift found that nine of Canada’s largest pension funds have billions in pension capital invested into 22 gas distribution, transmission, power generation and storage companies, collectively operating nearly 350,000 km in gas pipelines globally. 

As electrification technologies such as heat pumps for heating buildings, renewable energy for clean electricity generation and batteries for storage and flexibility have skyrocketed in recent years, utilities face the prospect of lower demand for gas transmission and distribution – creating a likely “gas utility death spiral.”

Shift’s report summarizes the latest expert analysis detailing why phasing out gas is required to meet climate obligations, and why hydrogen is unable to replace it.

The report examines six case studies from Canadian pension-owned gas companies that are making exaggerated claims about the role of hydrogen in their gas infrastructure:

  • National Gas (UK), 27.7% owned by BC public pension manager British Columbia Investment Management Corporation (BCI);

  • Scotia Gas Networks (SGN) (UK), 37.5% owned by Ontario Teachers’ Pension Plan (OTPP);

  • Open Grid Europe (Germany), 32% owned by BCI;

  • Società Gasdotti Italia (Italy), 69.4% owned by OTPP;

  • Exolum (Spain), 24.6% owned by Ontario Municipal Employees Retirement System (OMERS) and 10% owned by Investment Management Corporation of Ontario (IMCO); and

  • Tallgrass Energy (US), estimated 24.5% owned by Canada Pension Plan Investment Board (CPPIB).

"I expect my pension managers and trustees to exercise due diligence and effectively manage climate-related transition risks when it comes to my hard-earned retirement savings. I was shocked to learn how much my pension managers have bought into hydrogen propaganda spread by the gas industry and exposed my savings to gas assets that need to be decommissioned in order to protect my retirement security in a safe climate future."

– Lisa Jeffery, high school science teacher in Leamington, Ontario and member of the Ontario Teachers’ Pension Plan

For interview requests, questions or comments, please contact info@shiftaction.ca.

"We’ve come to expect the gas industry to protect its dead-end business model through greenwashing, lobbying, and public relations campaigns that pretend hydrogen is a silver bullet climate solution. That’s no surprise. But we should expect our pension managers to be sophisticated enough to see through this false hydrogen hype. Sadly, that doesn’t seem to be the case."

– Paul Martin, consultant with Spitfire Research and co-founder of the Hydrogen Science Coalition