2024 Canadian Pension Climate Report Card
OVERALL SCORE
F
Alberta Investment Management Corporation (AIMCo)
Climate Urgency
C-
Climate Engagement
D-
Climate Integration
F
Fossil Fuel Exclusions
F
Interim Targets
F
Paris-Aligned Target
F
The 2024 Canadian Pension Climate Report Card analyses, assesses and ranks the progress made by eleven of Canada’s largest pension managers and two international pension managers in their approach to climate risk and investment decisions as they relate to the climate crisis. The report is based on publicly available information to December 31, 2024.
AIMCo is the investment manager for Alberta government, endowment and specialty funds, and for the province’s public pension plans. Those pensions include the Alberta Teachers’ Retirement Fund, Local Authorities Pension Plan, Public Service Pension Plan and pension funds for provincial management employees, judges, and special forces.
Assets Under Management (AUM): $168.9 billion (June 30, 2024)
AIMCo, already alone in last place in Shift’s 2023 Report Card with an overall score of D, has fallen further to an overall F for 2024. The Alberta investment manager still has no net-zero commitment, no interim targets, and no fossil fuel exclusions, meaning it maintains its previous failing grades for these three climate indicators. AIMCo also drops to an F on a fourth indicator, Climate Integration, following blatant political interference in its governance structure.
In November 2024, Alberta’s premier fired AIMCo’s entire 10-person board of directors (three were subsequently re-appointed), its CEO and several other senior executives. The provincial government then installed the fossil fuel-entangled Stephen Harper as AIMCo’s new board chair despite conflict-of-interest concerns from Alberta’s ethics commissioner.
AIMCo's capacity and willingness to protect the retirement security of Alberta public pension plan members and align its portfolio with Paris Agreement goals appears to be compromised. Continued political interference will likely affect its ability to prudently manage climate-related risks, align its portfolio with climate science, and follow through on the already-underwhelming Climate Approach its previous leadership released in February 2024.
2024 UPDATES
None.
OVERVIEW
AIMCo has still not committed to achieve net-zero financed emissions by 2050 or sooner.
For a list of Paris-aligned commitments by other Canadian pension managers, see this report’s Table 1: Emissions Reduction Targets (total portfolio).
DETAILS
AIMCo released a Climate Approach on February 1, 2024, that still failed to commit the investment manager to net-zero.
AIMCo is accountable to its client funds, and at least one of these has made a net-zero commitment. The Alberta Teachers’ Retirement Fund announced in November 2024 that it will “transition its investment portfolio to achieve net-zero greenhouse gas emissions by 2050 or sooner.”
2024 UPDATES
Climate Approach failed to establish interim emissions reduction targets.
Announced a $1-billion “Energy Transition Opportunities Pool”, then quietly renamed it the “Energy Opportunities Pool”.
OVERVIEW
AIMCo remains one of the few major Canadian public pension managers with no interim emissions reduction targets, no timebound targets for climate solutions investments, and no targets for science-aligned climate engagement with its portfolio companies—and there is no indication that any are forthcoming.
For a list of interim climate-related targets set by other Canadian pension managers, see this report’s Table 1: Emissions Reduction Targets (total portfolio) and Table 2: Additional Climate-Related Targets.
DETAILS
Lack of emissions reduction targets
Not only has AIMCo failed to set interim emissions reduction targets, the investment manager did not even report on its financed or operational emissions in 2024. AIMCo did not release a climate-related financial disclosures report, breaking a five-year pattern.
In AIMCo’s 2023 climate-related financial disclosures report, the investment manager reported that both its absolute financed emissions and financed intensity metrics had increased relative to 2021.
Transition investment target
In February 2024, AIMCo announced an “Energy Transition Opportunities Pool”—a $1 billion pool of new capital to be “deployed to capitalize on the tailwinds of the global energy transition and decarbonization sectors.” No target date was set for investing the $1 billion. A description of the pool’s potential investments included “sustainable solutions”, “low-carbon renewable energy production”, and “electrification, storage, and energy efficiency”, but also signalled an interest in funding carbon capture and sequestration technology that has never been proven at scale.
The “Energy Transition Opportunities Pool” was quietly and retroactively renamed the “Energy Opportunities Pool” later in 2024, reportedly due to pressure from the Alberta government. See the Climate Integration section for further detail.
2024 UPDATES
Annual report barely mentioned climate.
2024 Stewardship Report and 2024 ESG Integration Report did not convey climate urgency.
Did not issue a climate-related financial disclosures report.
OVERVIEW
AIMCo does not acknowledge that it has a role in determining the success or failure of larger efforts to reduce emissions and stabilize the global climate. Its acknowledgement of the urgency of the climate crisis focuses instead on mitigating investment risks and seeking out competitive advantages.
DETAILS
AIMCo’s December 2023 Climate-related Financial Disclosures seemed to signal a shift in its public communications—beginning to acknowledge the urgency and gravity of the climate crisis and its risk to investment returns. On the basis of the 2023 disclosures and AIMCo’s release of a Climate Approach in 2024, AIMCo narrowly hangs on to its C- score in this category.
But AIMCo did not release a climate disclosure report in 2024. It has not clearly defined its role in addressing the systemic risks posed by climate change and it has not integrated the climate crisis as a focal point in its investment strategy.
AIMCo should build on its previous steps by acknowledging that its ability to generate returns depends on a stable climate and that its investment decisions affect the stability of the climate.
Sample language from AIMCo’s February 2024 Climate Approach:
“Climate change remains one of the most pressing systemic risks of our time and a material environmental factor we face not only as investors, but as members of an interconnected global community. How AIMCo and our portfolio companies identify, monitor and manage climate risks can significantly affect the long-term, risk-adjusted net investment returns we deliver to our clients. We understand the potential risks that climate change poses for our portfolios and are working toward ensuring they are resilient in an ever-changing world.”
Sample language from AIMCO’s April 2024 Proxy Voting Guidelines & Corporate Governance Principles:
“Climate change increasingly presents significant physical, regulatory and liability risks for investors while climate change preparedness can also be a source of competitive advantage for companies. Investors should be concerned with systemic environmental and social impacts, resultant stranded asset risk, asset impairment, legal liability and reputational risk.”
2024 UPDATES
Explained why it voted against a shareholder resolution calling for scope 3 emissions disclosure from Enbridge.
Did not sign on to a joint investor letter expressing support for the Canadian Sustainability Standards Board’s proposed climate disclosure standards.
OVERVIEW
AIMCo has not committed to a net-zero portfolio and has no timebound Paris-aligned goals for its engagement of owned companies, rendering its climate engagement process essentially meaningless.
DETAILS
In 2024, AIMCo offered explanations for a key shareholder vote and responded to previous critiques of its engagement approach in its first ever Stewardship Report—including by explaining the reasoning behind its vote against a shareholder proposal calling on Enbridge to disclose scope 3 emissions data. But AIMCo still must set Paris-aligned expectations for its owned companies, engage with the intention of achieving Paris-aligned outcomes, and strengthen its proxy voting guidelines.
Expectations and escalation
Portfolio companies
There is no indication that AIMCo requires portfolio companies to have credible, science-based net-zero transition plans. The investment manager does not prohibit owned companies from lobbying against climate action or from directing capital expenditure toward fossil fuel expansion. AIMCo does not require owned companies to tie executive compensation to the achievement of climate targets.
Proxy Voting Guidelines
AIMCo discloses its proxy votes on a daily basis and provides the rationale for its votes on shareholder proposals.
AIMCo’s Proxy Voting Guidelines & Corporate Governance Principles (effective April 2024) state that it expects investee companies to adopt “appropriate, industry-specific, environmental reporting protocols, such as the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)” and to have “board oversight and appropriate expertise to adequately manage climate change-related risks.”
The guidelines state that AIMCo will take a case-by-case approach on proposals requesting that “a company disclose non-proprietary policies and procedures to address climate change risk.” AIMCo will generally support proposals calling for TCFD disclosure. AIMCo adds that it “may vote against or withhold from relevant directors” in cases where companies have “failed to provide relevant climate-related disclosures, and/or insufficient action is being taken to address climate-related risks & opportunities.” However, the guidelines do not define what it means to “adequately manage” climate risks or what “insufficient action” would be, nor do they specify that AIMCo will support proposals for companies to set science-based net-zero targets and define net-zero-aligned transition strategies.
Engagement example
AIMCo provided an explanation for its May 2024 vote against a shareholder proposal calling for better climate disclosure from Enbridge, North America’s largest oil and gas pipeline company. The proposal from Investors for Paris Compliance called on Enbridge to disclose all its scope 3 emissions on an annual basis.
AIMCo stated in its 2024 Stewardship Report that, after meeting with both the company and the proponent, it voted against this proposal “due to the current complexity and lack of standardization in calculating the requested emissions for the midstream sector, and Enbridge’s recent efforts to expand its Scope 3 disclosures where feasible methodologies exist. However, AIMCo will continue to monitor Enbridge’s disclosure approach as reporting standards and methodologies evolve.”
External managers
AIMCo's first standalone ESG Integration Report, in 2023, stated that its responsible investing team completes annual assessments of external managers, but did not specify how this applied to climate concerns. AIMCo’s 2024 ESG Integration Report did not mention external managers, and its other 2024 reports offered little further detail about how AIMCo directs and assesses its external managers’ climate performance.
Collaborative engagement
AIMCo states that “Through direct and collaborative engagements and our proxy voting, AIMCo continues to improve companies’ transparency, climate disclosures, sustainability reporting, emissions target-setting and reductions, and more.” AIMCo did not disclose examples of collaborative engagement in 2024.
AIMCo is a member of Climate Action 100+ (CA100+) and Climate Engagement Canada (CEC). However, a February 2024 Investors for Paris Compliance analysis of a selection of shareholder resolutions aligned with CEC and CA100+ principles highlighted that AIMCo supported only 9 and opposed 15—offering weak rationales for such votes. In contrast, AIMCo’s British Columbia counterpart, the British Columbia Investment Management Corporation, voted for 21 and against 5 of those same proposals.
Policy engagement
AIMCo is the only Canadian pension fund analysed in this report that did not sign on to a June 2024 joint letter supporting the Canadian Sustainability Standards Board’s proposed climate disclosure standards to align with those of the International Sustainability Standards Board (ISSB)-- even though AIMCo's February 2024 Responsible Investment Policy explicitly supports the ISSB standards. Nor did AIMCo add its name to a joint investor statement expressing support for the finalized standards and calling for the corporate sector to not delay implementation.
2024 UPDATES
Released details of its in-house climate taxonomy in February 2024.
Announced a $1-billion “Energy Transition Opportunities Pool” in February 2024, then quietly renamed it the “Energy Opportunities Pool” several months later.
Saw its entire board of directors, its CEO and several other senior executives fired by the Alberta government in November 2024. Three directors were subsequently re-appointed.
Two of five AIMCo directors have concurrent legal obligations to oil and gas companies and investments.
Did not release an annual climate-related financial disclosures report in December 2024.
OVERVIEW
Alberta’s “independent” public pension manager has been the subject of blatant, inappropriate political interference from the Alberta government that likely heralds even weaker oversight of climate risks and greater investment in high-risk oil and gas investments.
DETAILS
In November 2024, Alberta’s premier summarily dismissed AIMCo’s entire 10-person board of directors, its CEO and several other senior executives. The provincial government then installed the fossil fuel-entangled Stephen Harper as AIMCo’s new board chair despite conflict-of-interest concerns from Alberta’s ethics commissioner. Three board directors were re-appointed.
Canadian experts such as Sebastien Betermier, Duane Bratt, Andrew Willis, Jim Leech, Ed Waitzer and Keith Ambachtsheer raised concerns about politicization, as did the presidents of CUPE Alberta, the Alberta Teachers’ Association and the Alberta Federation of Labour—key stakeholders of AIMCo’s client pension funds.
There is widespread speculation that the Alberta government’s primary motivation is to secure more political control over AIMCo-managed funds and direct more capital into high-risk oil and gas investments.
Accountable Paris-aligned membership
AIMCo is not a member of any accountable and credible Paris-aligned investor body.
Transparency and disclosure of holdings
Based on AIMCo’s public reporting, it is not possible to obtain a complete list of AIMCo’s assets. AIMCo has repeatedly ignored requests from beneficiaries for an inventory of its fossil fuel investments.
AIMCo has not released a list of investments within its “Energy Opportunities Pool”. This initiative was launched in February 2024 as a $1 billion pool of new capital to be “deployed to capitalize on the tailwinds of the global energy transition and decarbonization sectors.”
AIMCo initially named this new fund the “Energy Transition Opportunities Pool” in a press release and in its Climate Approach report, and its launch was covered that way in news articles. But the online versions of the press release and the Climate Approach were quietly and retroactively edited to remove the word “transition” from the name of the fund, at an unknown date before November 22, 2024. A two-page legal notice, including “Caution Regarding Forward-Looking Statements” and “Additional Caution Regarding Climate-Related Disclosures” was also retroactively inserted into the Climate Approach document. One source told The Financial Post the “Energy Transition Opportunities Fund” was renamed because of “sensitivities within the [Alberta] government.”
Transparency and disclosure of climate risk
AIMCo released annual climate-related financial disclosure reports for the five years leading up to 2023, but did not do so in 2024.
AIMCo’s in-house climate taxonomy, detailed in its February 2024 Climate Approach, references the Paris Agreement in its principles but fails to lay out any climate-related thresholds for screening new investments. The taxonomy also fails to set any expectations for how assets are expected to move from “grey” to “green”. And it does not include a plan to account for scope 3 emissions, stating only that “Scope 3 emissions data will be integrated into the taxonomy when a sufficient critical mass exists.”
Board climate expertise and/or fossil fuel entanglement
The Alberta government summarily dismissed all ten AIMCo board members in November 2024, then re-hired three of these—Bob Dhillon, Jim Keohane and Jason Montemurro. As of February 10, 2025, AIMCo was governed by a much smaller five-person board. The other two members are its chair, Stephen Harper, and Alberta’s deputy minister of finance and treasury board, Katherine White.
Three members of AIMCo’s new five-person board have connections to the fossil fuel industry. Dhillon sits on the board of Strathcona Resources, which calls itself “one of North America’s fastest growing oil and gas producers.” Harper is a working equity partner with Azimuth Capital Management, a North American private equity firm with $5.8 billion in energy investments, largely in the oil and gas sector. Montemurro was a partner at Azimuth from 2007 to 2019.
No AIMCo directors are identified as having climate expertise.
Executive compensation and climate
AIMCo’s 2024 publications, including its 2023 Annual Report, provided no evidence of a link between climate targets and executive or staff compensation.
Canadian pension managers Caisse de dépôt et placement du Québec, Healthcare of Ontario Pension Plan, Investment Management Corporation of Ontario, Ontario Municipal Employees Retirement System, OPTrust and Ontario Teachers’ Pension Plan have all disclosed a link between executive compensation and climate targets and/or climate strategy implementation.
2024 UPDATES
No updates.
OVERVIEW
AIMCo has no fossil fuel exclusions and in 2024 it continued its previous pattern of public statements demonstrating an intent to continue investing in fossil fuel assets.
For a comparison of AIMCo’s lack of fossil fuel exclusions with respect to other Canadian pension managers, see this report’s Table 3: Fossil Fuel Exclusions.
DETAILS
AIMCo appears to mistakenly believe that coal, oil and gas companies have Paris-aligned decarbonization pathways other than phase-out, and also that providing capital to fossil fuel producers to marginally lower their scope 1 and 2 emissions makes more sense than investing capital in proven, scalable and profitable climate solutions.
This dubious position against divestment from fossil fuels was evident in AIMCo’s February 2024 Climate Approach, which argues that “If investors direct capital only toward green, low impact companies, there is very little room to further improve real-world decarbonization efforts. Directing capital away from higher emitting sectors pushes companies closer to financial distress, thereby forcing them to focus on the short term, which can lead to firms halting abatement methods.”
AIMCo's managing director of sustainable investing re-iterated this argument to Benefits Canada magazine in November 2024, saying, “One of the things we were very clear on, both for ourselves and in talking to clients, is that divestment wasn’t the way we wanted to go,” because “if you divest, it’s not real world decarbonization — you’re divesting on paper, but the emissions are still there.”
This argument mischaracterizes the call for fossil fuel exclusions and phase-out plans as a call for divestment from high-emitting sectors more broadly. But while many high-emitting sectors have credible pathways to decarbonization that warrant investor support, coal, oil and gas do not.
ESTIMATED INVESTMENTS IN FOSSIL FUELS
$7.88 billion (as of December 31, 2023).
In last year’s report card, Shift estimated that AIMCo had between $5.3 billion and $9.8 billion in fossil fuel investments as of December 31, 2022.
AIMCo has not disclosed the value of its fossil fuel assets, despite repeated requests from Alberta public pension plan members for this information. Shift’s estimate relies on AIMCo’s 2023 Annual Report, which listed “Energy” as 7% of its $58 billion public equities and absolute return portfolio and “Pipelines & Midstream” as 19.3% of its $19.8 billion infrastructure portfolio. The true total value of AIMCo’s fossil fuel investments is likely higher than Shift’s $7.88 billion estimate, since “Integrated Utilities”, listed as 22.9% of AIMCo’s infrastructure portfolio, likely includes fossil fuel-based power generation.
AIMCo’s known fossil fuel assets:
A joint 65% stake in the Coastal GasLink pipeline.
An 87% stake in Howard Energy Partners.
An 85% stake in the Northern Courier pipeline.
100% co-ownership of TriSummit Utilities, which includes subsidiaries:
Apex Utilities Inc. (fossil gas utility in Alberta);
Eastward Energy (fossil gas distribution utility in Nova Scotia);
Pacific Northern Gas Ltd. (fossil gas distribution and transmission utility in northern British Columbia); and
Enstar Natural Gas (fossil gas transmission and distribution pipeline operator Alaska Pipeline Co., with a 65% interest in Cook Inlet Natural Gas Storage Alaska).
Overall
Publicly acknowledge the consensus science, including from the Intergovernmental Panel on Climate Change and the International Energy Agency, that limiting global temperature increase to 1.5°C requires an immediate end to expansion as well as the rapid phase-out of oil, gas, coal and related infrastructure.
Become a vocal proponent of stringent, ambitious, Paris-aligned climate and energy policies that provide certainty for companies and investments.
Join a credible and accountable Paris-aligned investor body, such as the Net-Zero Asset Owner Alliance or the Paris Aligned Asset Owners.
Paris-aligned target
Make a public commitment to a Paris-aligned target (net-zero by 2050 or sooner).
Set credible, science-based interim emissions reduction targets (including targets to reduce absolute emissions).
Define net-zero.
Report scope 3 emissions and develop scope 3 emissions reduction targets.
Develop and execute a plan to achieve real-world decarbonization.
Place a limit on the role of carbon offsets and credits in achieving targets.
Interim targets
Set credible, science-based interim emissions reduction targets (including targets to reduce absolute emissions).
Set targets for investments in climate solutions.
Set targets for the proportion of AUM covered by a credible net-zero plan.
Communication of climate urgency
Communicate the urgency of the climate crisis and the necessity to act to mitigate its worst impacts.
Acknowledge the agency that it and other investors hold in influencing the trajectory of the climate crisis.
Climate engagement
Publicly state expectation that owned companies have credible science-based net-zero pathways, with escalation up to and including divestment for those that do not meet timebound engagement milestones.
Set an expectation that owned companies:
tie executive compensation to the achievement of climate targets;
refrain from lobbying against climate action, directly or through industry associations; and
refrain from directing capital toward fossil fuel expansion.
Strengthen proxy voting guidelines.
Establish timebound, results-based targets for engaging with external fund managers on Paris-alignment.
Require that all new or renewed external fund manager contracts adhere to a Paris-aligned investment strategy.
Climate integration
Improve transparency and disclosure of approach to climate risks and investments.
Complete total portfolio carbon footprint. Improve granularity of disclosure and obtain limited third party assurance.
Complete 1.5°C scenario analysis and disclose results.
Require climate expertise on the board.
List climate expertise as a distinct category when disclosing board competencies.
Avoid conflicts of interest and refrain from re-appointing directors with simultaneous corporate directorships with fossil fuel companies to the board.
Establish a minimum time that must elapse in between holding a fossil fuel directorship and joining the board.
Link executive and staff compensation to achieving climate targets, and disclose weighting.
Fossil fuel exclusions
Place an exclusion on any new investments in coal, oil, gas and related infrastructure.
Commit to a time-bound and managed phaseout of existing fossil fuel assets.
Divest from fossil fuel producers.
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