World News – CA – New Analysis Finds Canada Pension Plan Heavily Invested in Six High Carbon Companies

This copy is for your personal, non-commercial use only Order
presentation-ready copies of Toronto Star content for distribution
to colleagues, clients or clients, or find out about
permissions / licenses, please visit: wwwTorontoStarReprintscom

The Canada Pension Plan is one of the largest public pension funds in the world, with $ 434 billion in assets under management in June The mandate of the Investment Board that manages it (CPPIB) has been to manage the funds in the best interests of Canadian CPP contributors and beneficiaries (Canada’s retirees) and to maximize return on investments – all without undue risk of loss As CEO and President of CPP Investments, Mark Machin, recently observed: “Our investment mandate and professional governance protect our decision-making from short-term distortions and enable us to contribute to shaping the long-term future « 

However, at Corporate Knights and our analysis of the Canadian Climate Law Office disclosures, we question the kind of future it is helping to create.In our report, Troubling Incrementalism, we found that the Office had invested heavily in six billion dollar high carbon investments, both in the Canadian oil sands and in hydraulic fracturing in the United States In four of the six cases examined, the Agency created the companies in question, invested billions of dollars and placed employees and former employees of the Agency on the boards of directors of the companies it had created.

The report raises the question of whether CPP Investments should continue to support the resource-intensive Canadian economy as it is today – financially risky and incompatible with the low-carbon economy – particularly now that the federal government is committed to reducing net emissions by 2050 The Board’s investments in oil sands and fractured gas fell 23% last year, making energy and resources its worst performing asset class If the Board expects losses for a decade or more in one investment category, shouldn’t it be long-term investing in new technologies, new businesses and future prospects?

Legal research by CCLI has found that Canadian courts, regulators and investors now recognize that climate change poses systemic financial risks and should be treated accordingly Pension trustees also have fiduciary duties in terms of intergenerational equity; Should the Agency’s investments not support the industries of the future that will create the jobs, infrastructure and growth Canada will need to become a successful economy in the 21st century?

Responding to concerns raised by the Office’s carbon-intensive holdings is not just about opting out of carbon-intensive investments It is about asking the Office to end its direct support to the Office. expansion of the oil sands and hydraulic fracturing in the US and asking it to start putting its money and management expertise to work in building businesses that will accelerate Canada’s transition to a low carbon future

Over the past few months, a number of promising studies have shown that there are significant economic and environmental opportunities in Canada, from investments in a low-carbon economy, from energy retrofits to existing buildings to investments in electric vehicle infrastructure to scale-up of nature-based solutions These are industries in which the financial sophistication and dedicated assets of the Office could well be harnessed to the service of developing new opportunities while supporting the transition to a low carbon economy The recently launched campaign on a new green bill estimates that Canada could see $ 308 back to the economy over the next decade for every $ 20 that the federal government invests today through existing independent institutions you have a fiduciary duty to Canadians

We believe it is time to have a serious discussion about the role of a national public pension fund in its home country We invite CPP Investments to engage with CPP contributors and beneficiaries in a discussion in-depth of its responsibilities to support the government’s transition policies If CPP Investments contributes to the development of low-carbon solutions, it could help unlock purely private capital through risk reduction and co-investment strategies, and could provide the kinds of venture capital that have long been lacking in the economy. canadian economy

We urge the Agency to take seriously its power to reshape the future in which Canadians retire

Copyright owned or licensed by Toronto Star Newspapers Limited All
rights reserved The republication or distribution of this content is
expressly prohibited without the prior written consent of Toronto
Star Newspapers Limited and / or its licensors To order copies of
Toronto Star articles, please see: wwwTorontoStarReprintscom

CPP Investment Board, Pensions, Finance, Management