Canadian Pension fund managers pledge climate action; Unions can push for more

In the run-up to COP26, and on the same day that Canada’s Big Six Banks joined the United Nations Net-Zero Banking Alliance (NZBA), Canadian institutional investors and some of its pension fund managers also hit the news, by releasing a new Canadian Investor Statement on Climate Change. Coordinated by the Responsible Investment Association (RIA), the statement signed on October 25 states: “We recognize that a transition to a net-zero economy will involve a major transformation of sectors and industries. We encourage all companies and stakeholders to facilitate a just transition that does not leave workers or communities behind. We also recognize that the financing required for transition activities and climate solutions presents an investment opportunity….. We further recognize that Indigenous Peoples have managed collective wealth for millennia – including lands, waters, and …..We support a transition to a net-zero economy informed by Indigenous perspectives, that supports Indigenous economic opportunities, and encourages business practices that align with the principles of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).”

The Statement sets out specific expectations for investees which include just transition, and pledges five actions for the investment community, such as integrating climate-related risks and opportunities into the investment processes and developing a climate action plan to achieve net-zero by 2050.  Further, the 36 signatories pledge to “ Ensure that any climate-related policy advocacy we undertake supports a just transition and the ambition of achieving global net-zero emissions by 2050 or sooner, and engage with our industry associations to encourage climate advocacy efforts that are consistent with these goals.”  

Pension funds which have signed on to the Statement  (so far) include:  British Columbia Investment Management Corporation, British Columbia Municipal Pension Board of Trustees, British Columbia Public Service Pension Board of Trustees, Canada Post Corporation Pension Plan, Caisse de dépôt et placement du Québec, Ontario Pension Board, Pension Plan of The United Church of Canada, University of Toronto Asset Management (UTAM), and the University Pension Plan.   

 “Only Labor Can Force Canadian Pension Funds to Divest From Oil “ (Jacobin, October 19)  puts this lofty new institutional Statement in perspective, as it takes a more critical look at one of the leading pension fund managers, the Caisse de dépôt et placement du Québec, and its September announcement that it would quit all oil production investments at the end of 2022.  After also highlighting examples of the fossil and mineral exploration investments of some of Canada’s major pension funds, the article concludes: “ ‘Financial sustainability’ — despite the Caisse’s announcement — will continue to take precedence over climate justice.” 

Thus, the main point of the Jacobin article is to urge unions to take action:

 “….the unions who represent the beneficiaries of these pension funds can fight to make sure that the deferred wages of workers are used for the common good. In many cases, unions appoint trustees to boards of investment funds. If the labor movement chose to organize around these issues, it would be a game changer. …. Public sector funds are subject to legislation and can be reformed through political action. Although they’ve been carefully designed to be free of democratic accountability, they are not immune to external pressure. Sustained organizing by unions and their members can lead to greater amounts of worker control over the use to which these large sums of money are put.”

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