Despite mounting pressure from Canadians who want their money to stop supporting oil and gas, the majority of the country’s largest pension fund managers continue to invest in that sector — and are led by individuals with close ties to fossil fuel companies.
CBC News reviewed publicly-available bios and resumes of leaders overseeing Canada’s 10 largest pension fund managers and found that eight organizations have at least one high-ranking member, either a board member or an executive, who is actively directing a company in the oil or gas sector.
Those companies include oil and gas production firms, pipeline operators, gasoline retailers and drilling rig contractors.
Current laws and regulations do not bar directors from holding roles at pension funds and companies in the oil and gas sector.
“There’s nothing wrong with a director being on more than one board. There’s nothing in law that prohibits you from doing so,” said corporate governance expert and Osgoode Hall Law School Prof. Barnali Choudhury.
However, Choudhury said she understands why it might raise questions for some. She encouraged members with concerns to contact their pensions to advocate for stronger climate action.
CBC News spoke with several people who have been doing exactly that — advocating for their pension funds to divest from oil and gas. Ties between board members and oil and gas companies have them questioning whose interests are truly being prioritized.
‘I’m going to … invest in something that I know is harming you’
Teri Burgess teaches Grade 4 in Comox Valley, on Vancouver Island in B.C. She said children today are growing up under the shadow of a changing climate, and the idea that part of her paycheque may contribute to that is beyond frustrating.
“It’s ridiculous to think that [pension directors] can serve the needs of their members as well as sit on another board,” said Burgess, who has two sons.
Burgess is attending her union’s annual general meeting this weekend, where she plans to support motions advocating for the British Columbia Teachers’ Federation to lobby their pension to divest.
Members have called for divestment in the past, but Burgess and others say they haven’t seen nearly enough progress.
According to a 2022 investment inventory update on BCI’s website, the pension fund manager holds shares in a range of oil and gas companies including ConocoPhillips, the company behind the controversial Willow oil drilling project in Alaska.
Burgess said she doesn’t want her income invested in key drivers of greenhouse gas emissions.
“I don’t know any colleague of mine in any school who wants to stand at the front of the room and say, ‘Hey kids … I’m going to continue to invest in something that I know is harming you.'”
Burgess’s pension fund is managed by the British Columbia Investment Management Corporation (BCI). Its executive vice-president and global head of infrastructure and renewable resources, Lincoln Webb, is also the chair of the supervisory board of natural gas transmission network Open Grid Europe, and a board member of Czech Gas Networks.
Neither Webb nor BCI’s media relations team responded to CBC’s multiple attempts to get in touch for comment.
Meanwhile, BCI has acknowledged in previous statements that “climate change poses a systemic risk to the value of our clients’ portfolios and to the global economy” and said it supported “the global path of net zero.”
It’s one example of how, despite varying degrees of climate commitments and net-zero policies from eight of Canada’s largest pension fund managers, there continue to be overlaps between the oil and gas industry and those funds, which represent a total of about $1.96 trillion in net assets.
Whose interests are they looking out for?
It’s simply “incompatible” to have pension board members sitting on oil and gas companies, according to retired economist Roy Culpeper.
Culpeper, who lives in Ottawa, used to work in the federal department of finance. One of the directors of his pension fund manager — PSP Investments — is Miranda Hubbs, who also serves on the board of Imperial Oil.
“It seems to me … impossible to serve both the interests of a major fossil fuel company on the one hand, and the interests of the pension fund and its beneficiaries on the other hand,” Culpeper said.
While day-to-day investment decisions are not generally made by board members, they do typically set strategy and approve overarching investment policies.
Culpeper’s concern is echoed by Andy Kroeker, executive director of the West Elgin Community Health Centre in southwestern Ontario.
“I don’t see how that conflict can not be a real one,” he said.
Kroeker’s pension fund — HOOPP — represents Ontario healthcare workers and already has a tobacco-free investment policy.
Like tobacco, Kroeker said climate change is a threat to people’s health and should be treated the same.
“I think HOOPP is making some strides … but my expectation is full divestment,” he said.
Pension fund managers deny conflict of interest
CBC reached out to each pension organization and individual named in this story. None of them agreed to an interview. Three responded with written statements.
A spokesperson for the Canada Pension Plan Investment Board said via email that “it does not make sense to suggest there is a conflict of interest because a director has experience in one specific area.”
The CDPQ highlighted that as of June of last year, it had divested from 90 per cent of its oil production assets, and said the board member who works with Texas oil and gas exploration company Pioneer Natural Resources has a focus on climate and sustainable investments.
A spokesperson for AIMCo said “board members are not selected on the basis of their particular sectoral experience, but rather the complement of skills and acumen that they bring.”
For the purpose of transparency, CBC also reviewed the list of board members and managers on its own pension plan. None of them had apparent ties to companies in the oil or gas sector.
Canadian pension funds lag behind others
Sustainable finance organization Shift Action tracks the climate commitments of Canada’s largest pensions and recently graded their sustainability in a report card.
Patrick Derochie, senior manager for Shift Action, said while some funds are showing signs of progress through net-zero targets and more investment in renewable energy, there’s still a long way to go.
“Canada is behind on this issue,” Derochie said.
The New York state pension fund and Europe’s biggest pension fund (APB) have both made the decision to drop fossil fuel stocks.
In Canada, the Quebec pension fund manager CDPQ is the only one that has committed to excluding oil producers from their portfolio, but not gas.
“The investment decisions of these pension funds can determine how quickly we shift away from fossil fuels, how quickly we reduce carbon emissions,” Derochie said.
Derochie wonders whether directors who are on the boards of fossil fuel companies are trying to advance the interests of oil and gas at the pension fund.
“That pension fund director who has to serve the interests of Imperial Oil … that’s a very different thing than the best interests of you or I.”
Who are the pension fund leaders with ties to oil and gas?
- Board member with Canada Pension Plan Investment Board (CPPIB).
- Board member with Kiwetinohk Energy Corp. (Alberta-based natural gas producer).
- Board member at Caisse de dépôt et placement du Québec (CDPQ, Quebec’s pension fund manager).
- Board member with Pioneer Natural Resources (Texas oil and gas exploration and production company).
- Board member with CPPIB, as well as president.
- Corporate secretary and director of Royal Canadian Securities Limited (holding company of gasoline retailer Domo Gasoline).
- Board chair with Investment Management Corporation of Ontario (IMCO).
- Board member with Precision Drilling Corporation (Alberta-based oil and gas drilling rig contractor).
- Board member with the Public Sector Pension Investment Board (PSPIB).
- Board member with Imperial Oil (Canadian petroleum refiner, crude oil and natural gas producer).
- Board member with Alberta Investment Management Corporation (AIMCo).
- Board member with Suncor (Alberta-based oil producer and refinery).
- Board member with Cheniere Energy (Texas-based owner and operator of liquefied natural gas terminals).
- Board member with CPPIB.
- Board member with Capital Power (Alberta power generation company which owns and operates natural gas, solar, and wind generation facilities).
- Board member with the Ontario Teachers’ Pension Plan (OTPP).
- Board member with Washington Gas.
- Board member with NuVista Energy (oil and gas exploration, development and production company).
- Board member with Parkland Corporation (Alberta-based supplier of fuel and operator of Chevron, Pioneer, Ultramar and Esso), board member with Trican Well Service (provides equipment and services for oil and gas wells).
- Executive vice-president and head of infrastructure and renewable Resources at BCI.
- Chair of the supervisory board of Open Grid Europe (natural gas transmission network).
- Board member with Czech Gas Networks.
- Board member with the Healthcare of Ontario Pension Plan (HOOPP.)
- Board member with Teine Energy (Alberta-based oil and gas exploration, development and production company).
www.cbc.ca 2023-03-17 08:00:00