The Canadian Pension Plan Investment Board continues to display a hypocritical disregard for its own sustainability principles, as reported in “CPPIB’s fracking operation in U.S. raises questions” in the Toronto Globe and Mail on September 27. The Globe and Mail describes the fracking activities and political donations of Crestone Peak Resources, a company 95% owned by the Canada Pension Plan Investment Board, and formed out of the ashes of Encana. The article reports that Crestone spent more than US$600,000 to support pro-business candidates who opposed tougher regulation of fracking in the 2018 Colorado state elections. Friends of the Earth Canada were involved in the Globe and Mail investigation and has posted unique information here .
The Energy Mix also published “’Canadians Don’t Want This: Fracking Company Owned By Canada Pension Plan Spent $600,000 To Influence Colorado State Elections” (September 30).The article quotes Professor Cynthia Williams, Osler Chair in Business Law at Osgoode Hall Law School in Toronto, who states: “It’s a “perfectly correct statement of corporate law” to say that CPP and Crestone are separate companies”, …. But it’s “an imperfectly correct answer to the ethical questions about CPPIB using its heft, based on the involuntary monetary contributions of millions of citizens and other people working in Canada, to try to shape politics to support its oil and gas investments, in Colorado, even as the Government of Canada has committed to working to transition to a low-carbon economy.”
Professor Williams is the author of Troubling Incrementalism: Canadian Pension Plan Fund and the Transition to a Low-carbon Economy , published in September by the Canada Climate Law Initiative. The report discusses CPPIB investments in fossil fuels in the last six years in detail, including fracking companies in Ohio and the Crestone company in Colorado, as well as oil sands expansion in Alberta and Saskatchewan. The report concludes by calling on CPP Investments to fundamentally re-evaluate its role, stating:
“Our view is that CPP Investments should be, and could be, making a substantial contribution to Canada’s future economy by supporting new technologies, new companies, and the just transition to a low-carbon economy. We argue that doing so would be more consistent with its statutory mandate to manage the assets of the CPP Fund in the best interests of the twenty million Canadian contributors and beneficiaries than is its current approach. It would also be more consistent with its common-law fiduciary duties, which require intergenerational equity.”
What can Canadians do to move their pension funds away from fossil fuels?
Friends of the Earth Canada offers an online letter to Heather Munroe-Blum (Chair, Canada Pension Plan Investment Board) and Mark Machin (CEO), with five recommendations arising from the Crestone investigation. FOE is also conducting open informational meetings about the CPP investments throughout Canada in October.
Shift Action is a project of Tides Canada which advocates for environmentally-responsible pension management. Their press release (Sept. 29) cites the Crestone investment, highlights the nearly $12 billion invested in Chinese coal mines and other fossil fuel companies (double its clean energy investments), and warns: “The CPP is betting Canadian retirement savings against the unstoppable transition to a clean energy economy, and fueling the global climate crisis in the process.” In an interview published in The Energy Mix , Shift Action’s Executive Director, Adam Scott urges Canadians: “One of the best ways to have an impact in this crisis is to make sure the funds that are invested on your behalf are invested in solutions to climate change, not in the problem. There’s a tool on our website that makes it easy for all Canadians to send a note to their pension funds asking what they’re doing on climate risk and how they’re investing.” Shift Action published a detailed guide to engagement in June 2019, Canada’s Pension Funds and Climate Risk: A Baseline For Engagement . It concludes with tips which include: “Each of Canada’s major pension plans has a different structure for governance and accountability. Beneficiaries should understand this structure and have a clear sense of their pension plan’s sponsors and governance model. Beneficiaries should engage with all relevant points of contact, for example a union pension representative or a government appointed pension trustee.”
And finally, for pension fund trustees, the Canada Climate Law Initiative flagship initiative is the Canadian Climate Governance Experts program, which offers “pro bono sessions on effective corporate governance to address climate-related financial risks and opportunities to corporate boards of directors and Canadian pension fund boards.”