The British Columbia Investment Management Corporation (BCI) is the fourth largest pension fund manager in Canada, and controls capital of $135.5 billion, including the pension funds of the province’s public employees. A June report asks the question: is BCI investing funds in ways that support the shift to a two degree C global warming limit? The answer is “no”, and in fact, fossil fuel investments have been increasing, according to the authors of Canada’s Fossil-Fuelled Pensions: The Case of the British Columbia Investment Management Corporation . For example, BCI boosted its investment in Kinder Morgan, owner of the Trans-Mountain pipeline, to $65.3 million in 2017 from $36.7 million in 2016.
An article in the Victoria B.C. Times Colonist newspaper summarizes the study and includes reaction from one of the authors, James Rowe, an associate professor at University of Victoria. Rowe states: “BCI claims to be a responsible investor. …But we find some hypocrisy in that we don’t find any good signs they are investing with climate change in mind.” The article also quotes an email from BCI, which defends the investment in Kinder Morgan, as “a passive investment held inside funds designed to track Canadian and global markets.” Further, it states, “BCI does invest in oil and gas companies, but that particular sector accounts for a significant portion of the Canadian economy. It’s about 20 per cent of the composite index on the Toronto Stock Exchange.” For more from BCI, see their website which provides their 2017 Responsible Investing Annual Report , as well as a Responsible Investing Newsletter, with the most recent issue (Oct. 2017) devoted to “Transparency and Disclosure”.
Canada’s Fossil-Fuelled Pensions: The Case of the British Columbia Investment Management Corporation makes the following recommendations so that BCI can align its investments with the 2°C limit:
- “A portfolio-wide climate change risk analysis to determine the impact of fossil fuels on BCI’s public equity investments in the context of the 2°C limit. And, subsequent disclosure of all findings to pension members.
- Divestment. The surest way to address the financial and moral risks associated with investing in the fossil fuel industry is to start the process of divestment: freezing any new investment and developing a plan to first remove high-risk companies from portfolios, particularly coal and oil sands producers, and then moving toward sector-wide divestment.
- Reinvest divested funds in more sustainable stocks. The International Energy Agency estimates that trillions of dollars of investment are needed in the renewables sector to support the transition away from fossil fuels.”
The report is part of the Corporate Mapping Project (CMP), jointly led by the University of Victoria, the Canadian Centre for Policy Alternatives, and Parkland Institute. CMP is a research and public engagement initiative investigating power dynamics within the fossil fuel industry.