Your pension plan, the one that belongs to every working Canadian over 18, just squandered yet another opportunity to exit the oil and gas fracking business and instead chose to double down.
After five years of operation that included more than 1,000 complaints from the public and questionable political contributions to U.S. Republicans, Crestone Peak Resources — a wholly-owned subsidiary of the Canada Pension Plan (CPP) — merged with three other Colorado oil companies, at least one recently restructured after bankruptcy. The new company, Civitas Resources, will be the largest Colorado-based oil and gas company.
The CPP received only stock in Civitas and will have one director on the board.
How does this square with Canada’s international climate action commitments recently announced at COP26?
It looks like this deal is part of a new climate change strategy recently announced by the Canada Pension Plan Investment Board (CPPIB). Disregarding all urgent calls from world leaders, scientists and its contributors and beneficiaries, the CPPIB says that it will continue to invest in high carbon industries, including oil and gas, while working with them to reduce their emissions.
This is the kind of thinking that emerged in the 1990s when the world still had decades to act and big polluting industries wanted to sound like they were concerned about climate change. In reality, it was nothing more than a stalling tactic and emissions, particularly from oil and gas, continued to rise. We wasted decades waiting for big polluters to make small improvements.
Now with time running out, the pressure is on to act and replace those big polluters with non-polluting industries. Isn’t it reasonable to expect one of the world’s biggest pension funds to understand the urgency like so many of its contemporaries?
It’s hard not to ask: what world is the CPPIB living in?
In the last year, people on every continent have felt the impacts of a changing climate, being hit by floods, wildfires, drought and heatwaves. In Canada, the climate emergency is real, as shown by the heat domes in the west and the recent climate catastrophes in both British Columbia and Atlantic Canada due to that now familiar term, atmospheric rivers.
Over the last year, other large financial institutions have made significant moves to protect their funds from the impacts of climate change. They, unlike the CPPIB, understand climate change is not just about emissions or divestment. It’s about climate risk.
Every investment can be impacted by climate change: real estate, insurance, toll roads and more.
Why is the Canada Pension Plan, with over $540 billion in assets, not leading the world in investing in solutions for recovery and resilience and instead shoring up long-standing polluters?
The new climate change strategy at the CCPIB is old-thinking when Canada and the world need future-thinking, fresh leadership. One way to do this is through governance, and the CCPIB board needs to take a hard look at who is on its board. Currently, 50 per cent of their directors have either direct experience working with fossil fuel companies or those who finance them.
It’s time to appoint new board members who bring climate risk assessment, clean tech and renewable energy expertise to the table. If not, we run the risk of falling behind other countries in their efforts to quantify and mitigate climate risk.
Canadians deserve better for their pension investments.
Photo courtesy of iStock
