While some encouraging elements are included, OPTrust’s Climate Strategy update and 2022-2023 TCFD report demonstrate a process-heavy approach that has resulted in few hard climate targets and no progress toward excluding new investments in fossil fuels, thus demonstrating that the fund is still struggling to align its $25-billion portfolio with the goals of the Paris Agreement.

The University Pension Plan’s new Climate Stewardship Framework represents one of the strongest approaches to climate-related engagement and stewardship in the Canadian pension sector, reaffirming UPP’s position as a climate leader. But UPP shies away from taking the necessary and Paris-aligned step of excluding fossil fuels from its portfolio, something that its members, including sustainable finance experts and climate scientists, have demanded since the plan’s inception.

Read the op-ed from Patrick DeRochie, Shift’s Senior Manager, in Corporate Knights.

“By pledging to grow its portfolio of oil and gas assets, CPPIB is making an alarming bet on the world failing to limit global heating to safe levels, putting the CPP at risk from an accelerating energy transition and our retirement security at risk from catastrophic climate change.”

Yesterday's Fall Economic Statement (FES) from the Government of Canada included several noteworthy updates in the world of sustainable finance, climate change and pensions.

In this Climate Pension Quarterly: a new climate plan from OMERS, the riskiness of carbon markets (attention: Canada Pension Plan Investment Board), and the foreseeable climate-related financial risks for Canadian pension funds who stocked up on European gas pipelines (attention: British Columbia Investment Management Corporation and Ontario Teachers’ Pension Plan).

At a quick glance, HOOPP members might mistakenly assume that HOOPP’s climate plan and net-zero emissions commitment mean that their retirement savings are no longer invested in the coal, oil, gas and pipeline companies whose products are fuelling the climate crisis. But that’s not the case.

After the hottest summer in recorded history, with municipalities across Canada facing wildfire evacuations, air quality warnings, extreme heat and flooding, it is encouraging to see OMERS taking many required steps to protect pensions and the climate in the face of the worsening climate emergency.  However, further detail, ambition and action will be required – in particular, action to end the relatively small amount of finance OMERS continues to provide for fossil fuels.

Working and retired public servants from across Canada sent a letter today to Prime Minister Justin Trudeau and his Cabinet asking them to remove Imperial Oil Director Miranda Hubbs from the board of the Public Sector Pension Investment Board (PSPIB) with cause. 

BCI, the $233 billion pension manager for 725,000 public sector employees, including teachers, health care workers, college and university staff, and provincial and municipal public servants, released its 2022-2023 Annual Report last week. BCI’s lack of a net-zero emissions commitment, failure to implement a fossil fuel exclusion, and continued investment in fossil fuels and related infrastructure demonstrate that the fund is not yet aligned with the goals of the Paris Agreement.

The reputation of some of Canada’s largest public pension funds as responsible investors with a record of due diligence, strong corporate governance and environmental oversight is being challenged this summer by the collapse of Thames Water, the United Kingdom’s largest water utility that services 15 million people. Partly owned by OMERS and BCI, Thames Water has become a poster child for a British water industry under fire for its poor environmental record and financial mismanagement.

A company privately owned by the Canada Pension Plan Investment Board (CPPIB) announced this morning that it’s spending CA$6.2 billion to increase its oil production by 60%. Ongoing, reckless investment in fossil fuel expansion by Civitas Resources (Civitas) makes a mockery of the CPPIB’s net-zero emissions commitment and gambles the retirement savings of millions of Canadians on climate failure. 

This quarter saw inspiring actions from pension plan members seeking to hold their pension managers accountable for investing their savings in a safe retirement, which inherently requires a liveable planet. Shift was also pleased to see some Canadian pension managers step up during shareholder season, with two bringing forward climate-related shareholder resolutions. Read on for the full stories in the Climate Pension Quarterly.

Working and retired public servants from across Ontario sent a letter today to their pension manager, the Investment Management Corporation of Ontario (IMCO), seeking clarity on its confusing policy for restricting and phasing out investments in fossil fuels.

While the Healthcare of Ontario Pension Plan’s (HOOPP) newly posted 2022 Real Estate Sustainability Report provides expanded disclosure of the fund’s approach to and challenges in real estate decarbonization, it also serves to highlight how little information HOOPP has made available regarding decarbonization of other asset classes.

Canada’s largest public pension funds claim that they need to stay invested in fossil fuels so that they can use their influence to help companies reduce greenhouse gas emissions. But an analysis of shareholder votes at recent investor meetings for big banks and fossil fuel companies shows most pension funds aren’t even doing the bare minimum. Pension funds are largely voting against climate-related shareholder proposals and allowing company directors to ignore growing climate-related financial risks. Some pension funds won’t even disclose to their members how they’re voting. 

Yesterday the Canada Pension Plan Investment Board (CPPIB) released its annual report for the fiscal year ending March 31, 2023. With $570 billion in assets under management, the CPPIB is making big and growing investments in climate solutions and taking a more sophisticated approach to managing climate-related financial risks. But a close read of its 2023 annual report shows Canada’s national pension manager continues to obscure its exposure to and prolongation of the fossil fuel economy while failing to understand that its mandate will be impossible to fulfill without urgent action to avert catastrophic climate change. The CPPIB has considerable work to do to establish a credible climate strategy. Read about the good, the bad and the ugly of the climate and energy highlights from the CPPIB’s 2023 annual report.

Last month, BCI released its 2022 ESG Annual Report, which provides further evidence that BCI is responding to calls from pension plan members for increased disclosure of how it is handling climate-related financial risks. In some ways, BCI is demonstrating climate leadership in the Canadian pension sector, but a close read shows that BCI’s strategy has an overreliance on false climate solutions like carbon capture, utilization and storage (CCUS) and carbon offsets, a fatally flawed approach to engaging fossil fuel companies, and a lack of a plan to disclose credible, science-based climate plans for its growing portfolio of fossil fuel assets.

For years now, Canada’s pension plans have told their beneficiaries that their active ownership of companies holds the key to solving the climate crisis and protecting pensions from climate-related financial risks. This year’s Annual General Meeting (AGM) season is an opportunity for them to prove it through their votes on climate-related resolutions brought by shareholders of two of Canada’s biggest climate polluters– Enbridge and Suncor.

This quarter turned up the heat on pension funds and climate, kicking off with Shift’s inaugural Canadian Pension Climate Report Card and winding up with CBC profiling pension fund beneficiaries calling on their pension funds to divest from fossil fuels. In between, pension funds reported annual results, updated proxy voting guidelines, and one released a climate plan. Read on for the full stories in Shift’s Climate Pension Quarterly.

Shift welcomes measures in the 2023 federal budget to leverage private investment to accelerate the decarbonization of Canada’s economy. But we are concerned that the government’s plans place too much priority on risky, unproven technologies that at best drive incremental emissions reductions while ignoring the need to rapidly transition away from oil and gas to meet Canada’s climate commitments under the Paris Agreement. The government’s decision to mandate the Public Sector Pension Investment Board (PSP Investments) to manage the Canada Growth Fund (CGF) underscores our concerns.