Answering Mark Carney: What are the climate plans for Canada’s banks and pension funds?

On December 18, the Bank of England was widely reported  to have unveiled a new “stress test” for the financial risks of climate change. That stress test is a proposal contained in an official BoE Discussion Paper,  2021 biennial exploratory scenario (BES) on the financial risks from climate change , open for stakeholder comments until March 2020.  Mark Carney, outgoing Governor of the Bank of England, has led the BoE to a leadership position on this issue in the financial community and will continue  in his new role as United Nations special envoy on climate action and climate finance in 2020.  In a December BBC interview reviewing his legacy, he warned the world yet again about stranded assets and asked: “A question for every company, every financial institution, every asset manager, pension fund or insurer: what’s your plan?”

What are the climate plans for Canada’s pension funds ?

shift action pension report 2019In their June 2019 report, Canada’s Pension Funds and Climate Risk: A Baseline For Engagement  , ShiftAction concludes: “Canadian pension funds are already investing in climate solutions, but at levels that are far too low relative to the potential for profitable growth, consistent with levels required to solve this challenge.” The report provides an overview, and importantly, offers tips on how to engage with and influence pension fund managers.

Since then…..

The sustainability performance of  the  Canada Pension Plan Investment Board (CPPIB) continues to be unimpressive, as documented in  Fossil Futures: The Canada Pension Plan’s failure to respect the 1.5-degree Celsius limitreleased in November ccpaFossilfuture2019 by the Canadian Centre for Policy Analysis-B.C. (CCPA-BC).  According to the CPPIB Annual Report for 2019, (June 2019) the CPPIB is aiming for full adoption of the Task Force on Climate-related Financial Disclosures recommendations by the end of fiscal 2021 (page 28).

Canada’s second largest pension fund, the Caisse de dépôt et placement du Québec (CDPQ), announced in November that CEO Michael Sabia will retire in February 2020 and move to the University of Toronto Munk School of Global Affairs and Public Policy. The press release credits Sabia with leading the Caisse to a position of global leadership on climate change, beginning in 2017 with the launch of an investment strategy which aims to increase low-carbon assets and reduce the carbon intensity of investment holdings by 25%. In 2019, the Caisse announced that its portfolio would be carbon-neutral by 2050.   Ivanhoé Cambridge ,the real estate subsidiary of the Caisse de dépôt, has a stated goal to increase low-carbon investments by 50% by the year 2020 and to reduce greenhouse gas emissions by 25% by the year 2025. In December 2019, Ivanhoé Cambridge announced that it had issued a $300 million  unsecured green bond to finance green initiatives – the first real estate corporation in Canada to do so. Shawn McCarthy reviewed Sabia’s legacy in “Canada’s second largest pension fund gets deadly serious about climate crisis”, in Corporate Knights in December.

AIMCo, the Alberta Investment Management Corporation is a Crown Corporation of the Government of Alberta, with management responsibility for the public sector pensions funds in Alberta, along with other investments. In November 2019, the Alberta government passed Bill 22, which unilaterally transfers pension assets from provincial worker plans to the control of AIMCo (see a CBC summary here ). The Alberta Federation of Labour and the province’s large unions protested in a joint statement, “Union leaders tell UCP: ‘The money saved by Albertans for retirement belongs to them, not to you!’” (Nov. 20) . The unions state: “we’re worried that what you’re attempting to do is use other people’s money to create a huge slush fund to finance an agenda that has not yet been articulated to the public – and which most people would not feel comfortable using their life savings to support.” And in December 2019, those worries seem to come true as AIMCo announced  its participation in a consortium to buy a 65% equity interest in the controversial LNG Coastal GasLink Pipeline Project from TC Energy Corporation. Rabble.ca reported on the demonstrations at AIMCo’s Toronto offices regarding the Coastal Gas project in January .

On January 8, the Toronto Star published  “Toronto asks pension provider: How green are our investments?” – revealing that the city has asked for more details from the Ontario Municipal Employees Retirement fund (OMERS). OMERS, with assets of over $100 billion, manages the pension savings of a variety of Ontario public employees, including City of Toronto and Toronto Police, Fire, and Paramedics. On January 8, OMERS announced the latest consolidation of Toronto pension plans with its consolidation of the Metropolitan Toronto Pension. Its Sustainable Investment Policy statement is here .

What are the climate plans for Canada’s private Banks?  

The 10th annual edition of Banking on Climate Change: the Fossil Fuel Finance Report Card was released in October 2019 by Banktrac, Rainforest Alliance Network and others . It states that $1.9 trillion has been invested in fossil fuels by the world’s private banks since the Paris Agreement, led by JPMorgan Chase, Wells Fargo, Citi and Bank of America. Canadian banks also rank high in the world: RBC (5th), TD (8th), Scotiabank ( 9th), and Bank of Montreal (15th).  Also in October, the World Resources Institute green-targets2published Unpacking Green Targets: A Framework for Interpreting Private Sector Banks’ Sustainable Finance Commitments , which includes Canadian banks in its global analysis and provides guidance on how to understand banks’ public documents.  “How Are Banks Doing on Sustainable Finance Commitments? Not Good Enough”  is the WRI blog which summarizes the findings.

Since then….

On September 14, the Canadian Imperial Bank of Commerce announced the release of their first climate-related disclosure report aligned with the Task Force on Climate-Related Financial Disclosures. Building a Sustainable Future highlights the CIBC’s governance, strategy, and risk management approach to climate related issues. It provides specific metrics and targets, especially for its own operational footprint, but also a commitment: “to a $150 billion environmental and sustainable finance goal over 10 years (2018-2027).”

Scotiabank also announced climate-related changes in November, including “that it would “mobilize $100 billion by 2025 to support the transition to a lower-carbon and more resilient economy”; ensure robust climate-related governance and reporting; enhance integration of climate risk assessments in lending, financing and investing activities; deploy innovative solutions to decarbonize operations; and establish a Climate Change Centre of Excellence “to provide our employees with the tools and knowledge to empower them to act in support of our climate commitments. This includes training and education, promoting internal collaboration, and knowledge and information sharing.”  Their 4-page statement on climate commitment  is here. Their  2018 Sustainable Business Report (latest available) includes detailed metrics and description of the bank’s own operations, including that they use an Internal Carbon Price of CAD$15/tonne CO2, to be reviewed every two years.

RBC, ranked Canada’s worst fossil-fueling bank in the 2019 edition of Banking on Climate Change , released a 1-page statement of their Commitment to Sustainable Finance (April 2019)  and an undated Climate Blueprint  with a target of $100 billion in sustainable financing by 2025.  However, in their new research report,  Navigating the 2020’s: How Canada can thrive in a decade of change , the bank characterizes the coming decade as “Greener, Greyer, Smarter, Slower”, but offers little hope of a change in direction. For example, the report states “ Canada’s natural gas exports can also play a role in reducing emissions intensity abroad. LNG shipments to emerging economies in Asia, where energy demand is growing much faster than in Canada, can help replace coal in electricity production, just as natural gas is doing here in Canada. …As climate concerns mount, Canada’s challenge will be to better sell ourselves as a responsible, cleaner energy producer.”

Canadians favour a shift away from oil and gas, 68% support federal help for worker transition

abacus 2019 just transitionAn online survey  was conducted by Abacus Data in mid- December 2019 to gauge opinion about an energy transition and compare attitudes in Alberta with those in the rest of Canada. The summary was posted to the Abacus website on January 3 and to Clean Energy Canada, which commissioned the survey, here .  Based on responses from a random sample of 1,848 adults,  a majority of Canadians and Albertans recognize that energy transition is a global issue and a necessary development, although in Alberta, only 49% see it as beneficial for the province in the long-term.

Further insights:  

72% across Canada, and 60% in Alberta would prefer to see Alberta’s economy shift over time because “global demand will change and Alberta will be left behind if the province is more dependent on oil.”

40% of Albertans want their Premier to “reject the idea of an energy shift and promote growth in Alberta’s oil sector.”  (Nationally, only 32% support promoting Alberta’s oil sector).

57%  of Albertans said an energy transition should be done more slowly or not at all, and 45% see it as intended to punish Alberta’s workers.

Nationally, 68% of respondents support federal government help for Alberta’s workers seeking new opportunities.  In Alberta, only 49% support such federal help for transitioning workers, while 51% want the federal government to help grow the province’s oil sector.

Canadian Energy Centre: promoting the message that “Canadian oil and natural gas can make this country and the world better”

alberta energy war roomOn December 11, the Alberta government of Jason Kenney launched its “rapid-response war room” – deceptively called the Canadian Energy Centre –  using $30 million to argue for the benefits of the oil and gas industry and attack any criticism as “misinformation”. By January 6, in an article in the Edmonton Journal, the provincial NDP party reviews the agency’s performance to date and calls for it to be shut down.   Chris Turner also describes the inept launch of the CEC in an Opinion piece in the National Observer, calling it  a “$30 million bonfire”, and the criticism reaches its peak in “The Silly, Scary Truth about Alberta’s New Ministry of Truth” by Andrew Nikoforuk in The Tyee (Jan. 1) .

Despite the ridicule and criticism it has earned, the publicly-funded Canadian Energy Centre continues to post supportive, good news stories about Teck’s Frontier oil sands mine, the Trans Mountain pipeline, Enbridge Line 3,  Coastal GasLink, and more – using its  Twitter account  with almost 5,000 followers, Facebook,  and its web site . Readers should be aware that in an unguarded moment in an interview with Global News, CEO Tom Olsen explained: “We are not about attacking, we are about disproving true facts.”

Alberta coal phase-out experience as a blueprint for just transition

Parkland alberta coal_phaseout_coverOn November 20, the Parkland Institute at the University of Alberta released a new report: Alberta’s Coal Phase-out: A Just Transition? .  Acknowledging that there is no single approach to just transition, co-authors Ian Hussey and Emma Jackson consider some common values and approaches expressed in the just transition literature: support for re-employment or alternative employment, income and benefit support, pension bridging and early retirement assistance, and retraining and educational programs for workers.  The press release quotes Ian Hussey: “While far from perfect, the Alberta transition programs provide a blueprint that will become increasingly important in the coming decades as the world makes the shift away from fossil fuels.”

The report evaluates the real-world experience of the coal phase-out in Alberta, which began in 2012 under the federal Conservative Harper government, and accelerated after 2015 under the provincial policies of the New Democratic Party. It describes in detail the events and context of the provincial transition policies, and uses case studies of three companies – TransAlta, ATCO, and Capital Power- as well as  a community case study of Parkland County.  The report concludes with an analytic discussion, evaluating the government’s transition programs for workers and for coal communities.  The full report is here ; an Executive Summary is here .

The report is a joint publication of the Parkland Institute at the University of Alberta, and the Corporate Mapping Project,  a joint initiative led by the University of Victoria, the Canadian Centre for Policy Alternatives BC and Saskatchewan Offices, and the Parkland Institute.

Workers who respond to wildfires – some news you might have missed

The Columbia Journalism Review published an article on November 1: “What journalists miss when covering the California fires” . It states “we discuss celebrities and show pyro-pornography to capture attention. …. journalists could also use the borrowed interest to discuss bigger environmental consequences impacting people inside (and sometimes outside) of California.”

firefight in smokeHere are some articles which  focus on the impacts for working people in California and Canada, especially first responders and health care workers.  A previous WCR article,  “What happens to workers when wildfires and natural disasters hit?”  appeared in December 2017, after the Fort McMurray wildfires in Alberta.

California:

At PG&E, a workforce on edge — and under attack — as fire season arrives” in the San Francisco Chronicle (June 8) describes how front line workers are suffering harassment because the public blames their employer, Pacific Gas and Electric Company, for the 2018 Camp fire, as well as for the disruptions of their planned power outages to avoid sparking more fires.

A blog post  Power Shutoffs: Playing with Fire summarizes the issue of California power shutoffs and includes anecdotal reports from a  focus group study of home health care and nursing home workers, which  found that lack of communication was a common problem as they try to care for or evacuate their vulnerable patients.  The focus group was convened by the Emerald Cities Collaborative and SEUI2015.

Home healthcare in the Dark : Why Climate, Wildfires and Other Emerging Risks Call for Resilient Energy Storage Solutions to Protect Medically Vulnerable Households from Power Outages. This report published by Clean Energy Group and Meridian Institute in June 2019  identifies the problems associated with unreliable power when the electric grid goes down either through disaster or through  planned power outages to prevent wildfires. The report  makes a series of recommendations directed at policy makers, including:  “truly resilient power should be generated onsite, should not be dependent on supply chains that may be disrupted during catastrophic events”.

Getty fire: Housekeepers and gardeners go to work despite the flames” in the LA Times which also highlights the chaos brought by lack of communication, and the need for low-wage workers to work, despite danger.

International Association of Firefighters press release “California Members Work around the Clock to Contain Wildfires” provides an overview of  wildfire fighting by their members and points out that firefighters’ homes may also be in the path of destruction. (a fact that is true for other essential workers such as  health care workers).

“As fires rage, California refines an important skill: Evacuating” in the Washington Post (Oct. 29).  Describes the challenges of first responders responsible for vulnerable patients in hospitals.

New threats put wildfire fighters health on the line”  in the New York Times points out : “While burning wood poses some threat to lungs, man-made products and the gases and particles they produce when burned are far more dangerous…Unlike urban firefighters dealing with structural blazes, these wildfire responders do not wear heavy gear that filters air or provides clean air because the gear is unwieldy and too limited to allow the kind of multi-hour, high-exertion efforts demanded on the front lines of these large outdoor infernos.”

And from 2017, “Suicide rate among wildland firefighters is “astronomical”” in Wildfire Today  , based on a more substantial article in The Atlantic: “A Quiet Rise in Wildland-Firefighter Suicides”

 

Canada:

Climate change is making wildfires in Canada bigger, hotter and more dangerous”  in Maclean’s (July 18 2019) is a quick overview of the Canadian experience.

We were blindsided: Rappel firefighters criticizes UCP for axing program  in the Edmonton Journal  (Nov. 7) and an article in the newspaper Fort McMurray Today react to the Alberta government cuts which will eliminate the 40-year-old rappelling program, which employs more than 60 firefighters who rappel from helicopters into forest fires. Staffing for close to 30 wildfire lookout towers and one air tanker unit will also be cut. The articles describe the dangerous job of fighting fires.

A  British Columbia government press release at the end of October 2019 announces two research projects underway to study  firefighter health and wellness (including its physical, mental and emotional dimensions).  One at the University of Northern B.C. is a scoping study to contribute to a long-term research strategy for worker health by the B.C. Wildfire Service. The second, supported by the government of Alberta,  is examining the nature and concentration of polycyclic aromatic hydrocarbons in the air that firefighters breathe and accumulate on their skin. This study will also “explore the practicality and effectiveness of firefighters using respiratory protective equipment; and investigate whether wildland firefighters have more chronic lung disease than other people of the same age, gender and geographic location.” A progress report on the initial phase of this project is expected in March 2020.

“Fire-weary Western Canadians are picking up stakes and moving on” in the National Observer (June 24  2019)considers the impact of smoke as well as fire over the past two years in the West, discussing how “residents … young and old, often on fixed or limited incomes, are making tough choices about where they want to live and to work. The decisions are being informed by many factors, but often the most pressing concern is the increasing frequency of forest fires.”  (This updates some of the themes of a 2017 Globe and Mail article “Fort MacMurray wildfires leaves livelihoods in limbo” ).

Unions have made consistent and significant donations to wildfire-affected communities.  Some examples: “Steelworkers Humanity Fund Contributes $69,000 to Fort McMurray Recovery” (2016); “Steelworkers Contribute $100,000 to B.C. Fire Relief” (August 2017),  and Steelworkers Humanity Fund Contributes $58,950 to Support Disaster Recovery Here and Abroad (June 2019) –  which specifies a $10,000  donation to the  High Level Native Friendship Centre food bank in Northern Alberta after  forest fires caused  the evacuation of the town.  Also,  “Unifor wildfire relief donations top $220k” in 2017, and  a 2018 press release announced $150,000 to the B.C. Fire Relief Fund of the Canadian Red Cross in 2018 through Unifor’s Canadian Community Fund  as well as its Social Justice Fund .