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Global News
19 hours ago
- Business
- Global News
Climate group voices concern about fossil fuel industry representation on pension fund boards
A climate advocacy group says oil and gas representation on the boards of Canada's big public pensions raise concerns about conflicts of interest. In a report out Thursday, Shift said that as of June 1, the boards of five of Canada's largest public sector funds had members who are also involved with fossil fuel companies. The pension-focused group argues that funds have a legal responsibility to act in the long-term best interest of beneficiaries, and that the interests of fossil fuel companies could compete with efforts to manage climate-related risks and reduce emissions. 'It's easy to see how fossil fuel company directors could potentially find themselves with real or perceived conflicts, and how such conflicts, if not addressed, could undermine prudent pension governance,' said Shift executive director Adam Scott in a statement. The report says CPP Investments, Canada's largest pension fund, has the second-highest representation with three in ten members of its board having ties to the industry. Story continues below advertisement The fund, which recently dropped its commitment to reach net-zero financed emissions by 2050, wholly rejected the concerns raised by Shift. 'The report is nonsense,' said Michel Leduc, global head of public affairs and communications at CPP Investments, in a statement. 0:57 CPP Investment Board head says he backs West's 'responsibly-produced conventional energy' 'We seek out the most seasoned professionals to undertake a complex role of overseeing the management of a global investment organization … The energy sector's total GDP contribution to Canadian economic activity is disproportionately significant and that's precisely where you find top governance experience in Canada with a view to the best interests of contributors and beneficiaries.' Get weekly money news Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday. Sign up for weekly money newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Other funds the group found with cross-appointments include the Ontario Teachers' Pension Plan, Public Sector Pension Investment Board, Alberta Investment Management Corp. and Ontario Municipal Employees Retirement System. AIMCo, where the Alberta government dismissed the entire board last year and installed new members, had the highest industry representation at a third, or two of six members. Story continues below advertisement The pension fund's members are selected through a 'rigorous appointment process and are subject to AIMCo's Code of Conduct,' said spokeswoman Carolyn Quick in a statement. Other funds did not immediately respond to a request for comment. Shift said that in total, nine current board members across the funds sit on the boards or executive teams of 12 oil and gas companies, or investment firms focused on the industry. It notes, however, that the number of boards with fossil fuel representation has gone down from seven to five since its last report in 2022. The boards of Healthcare of Ontario Pension Plan, Investment Management Corporation of Ontario and CDPQ no longer have fossil fuel representation, it said.
Hamilton Spectator
22-05-2025
- Business
- Hamilton Spectator
Canada Pension Plan investment arm scraps net zero commitment
The investment arm of the Canada Pension Plan has scrapped its commitment to achieving net zero greenhouse gas emissions, making it the only large Canadian pension fund to abandon the sustainable pledge. CPP Investments, a Crown corporation managing some $700 billion on behalf of millions of Canadian workers and retirees, disclosed the move in a Frequently Asked Questions page on its website, which was updated on Wednesday. The pension fund first announced its commitment to making its investment portfolio and operations net-zero by 2050 three years ago. But now, it says it is under increasing pressure to adopt greenhouse gas emissions metrics and interim targets that don't align with the 'complexity' of its global investment portfolio. 'In reality, we have not changed our approach to climate in how we invest — it's more about coherence and consistency,' Michel Leduc, managing director of public affairs and communications at CPP Investments, wrote in an emailed statement to the Star. 'What hasn't changed are the actions we take to integrate sustainability into our investment strategy. We continue to expect investment due diligence processes to identify material sustainability factors, including those related to climate change, and integrate the findings into investment decisions and ongoing asset management.' Critics, however, believe the move represents a form of greenwashing. 'What it looks like to me is that they don't feel that their commitment from 2022 was credible,' said Patrick DeRochie, senior manager at advocacy group Shift Action for Pension Wealth and Planet Health. 'They've been touting this for years as being critical to their investment strategy, and all of a sudden they're quietly saying that they're backing out,' DeRochie added. 'I really think this is unacceptable and it's a big abdication of the Canada Pension Plan investment board's duty to invest in the best interest of Canadians.' Climate advocates are concerned that CPP Investments remains invested in fossil fuel infrastructure, despite scientists warning that fossil fuels must be rapidly phased out to ensure a climate-safe future. CPP Investments did not immediately respond to DeRochie's comments. The fund also published its annual fiscal 2025 results on Wednesday. It reported $714.4 billion in net assets as of March 31, up from $632.3 billion a year earlier. The increase consisted of $59.8 billion in net income and $22.3 billion in net transfers from the Canada Pension Plan. But the returns on its benchmark portfolios of 10.9 per cent surpassed the fund's net return of 9.3 per cent. Investments in the U.S. also grew over the last year, and are now 47 per cent of the $714.4 billion portfolio, despite persistent calls for Canadian pension plans to invest more domestically in the wake of U.S. President Donald Trump's tariffs.
