An advocacy group is calling on Canada’s public pension managers to use their financial heft to more publicly work to reduce climate change as political efforts become less reliable.
In a new report, Shift Action for Pension Wealth and Planet Health says Canada’s big pension funds need to recognize the power and influence they wield and to more actively use it as U.S. President Donald Trump unravels momentum on climate action and a Canadian carbon tax policy looks to be on the way out.
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The group’s executive director Adam Scott says political backsliding only increases the urgent need for financial leadership to fill the void. Shift’s report assesses the climate commitments of 11 of Canada’s largest pension managers and finds most are making some progress but it’s concerned about the pace as well as the backsliding by some.
The report says the Caisse de dépôt et placement du Québec is still the leader of the pack, citing the investment organization’s full divestment of coal and oil assets, while the Alberta Investment Management Corp. received a failing grade for its apparent politicization and failure to set climate targets.
The group also calls out the Canada Pension Plan Investment Board, Canada’s largest pension fund, for its lack of interim climate targets and its growing portfolio of oil and gas assets without showing how the holdings have a decarbonization pathway. The CPPIB has pushed back against divestment calls, saying it’s working with oil and gas companies to reduce emissions while maintaining needed access to energy.
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The report card, which gave the Caisse a B+, the CPPIB a C- and the AIMCo an F, also gave high marks to the Investment Management Corp. of Ontario and the University Pension Plan, while the British Columbia Investment Management Corp. and the Public Sector Pension Investment Board came in on the low end.
The report says while pension funds have tended to avoid controversy, it’s time to graduate from building capacity to leading the way. Scott says pensions need to think long term as their funds require a stable climate to fulfil their mandates.
“The climate crisis is subject to the laws of physics and not to four-year election cycles.”
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