Activism is working to move pension funds away from stranded fossil assets

 “Canadian pensions are retiring fossil fuel investments” (Corporate Knights magazine, November 9) strikes a hopeful note about the state of Canada’s pension funds, stating:  “Canadian pension portfolio exposures to fossil fuel stocks are down to a 10th of what they were 10 years ago, notwithstanding some controversial private equity investments.”   The article summarizes analysis from the Canadian Pensions Dashboard for Responsible Investing, a new project of The Natural Step Canada, Smart Prosperity Institute, and Corporate Knights.  That full report is a unique overview of sustainability performance, and employs measures such carbon footprint of the portfolio, presence of net-zero targets, the pay link to Environmental Standards (ESG), support for shareholder environmental resolutions, and more.

Another related Corporate Knights article describes youth-driven campaigns which have challenged pension plans to acknowledge and adjust to climate risk.  “How young people are using climate litigation to fight for their future” focuses on youth activism targeting pension funds. It describes a years-long challenge to the Retail Employees Superannuation Trust (REST)  in Australia, which ultimately ended in the pension fund settling a lawsuit out of court by acknowledging that “climate change is a material, direct and current financial risk” that could “lead to catastrophic economic and social consequences.”  The fund also agreed to be more proactive and “ensure that investment managers take active steps to consider, measure and manage financial risks posed by climate change and other relevant ESG risks.”  A second example describes the current activist campaign calling for the Ontario Teachers’ Pension Plan (OTPP) to phase out all current fossil fuel investments by 2025 and completely decarbonize its portfolio by 2030. Retired teachers and high school students have mobilized in Toronto, under the leadership of Shift Action for Pension Wealth and Planet Health (Shift), which is organizing similar campaigns at the ten largest Canadian pension funds.  In September 2021, the Ontario Teachers Pension Plan Board announced  “industry-leading targets to reduce portfolio carbon emissions intensity by 45% by 2025 and two-thirds (67%) by 2030, compared to its 2019 baseline. These emission reduction targets cover all the Fund’s real assets, private natural resources, equity and corporate credit holdings across public and private markets, including external managers.”    The WCR has more detail here .

Relevant to all pension management: new research published in Nature Energy   and summarized in The Guardian with this headline:  “Half world’s fossil fuel assets could become worthless by 2036 in net zero transition” .

Historic court decision in Mathur v. Ontario government – Youth Charter challenge for stronger GHG emissions reductions can proceed

Although the Supreme Court decision about Canada’s carbon pricing system on March 25 was undoubtedly historic, it overshadowed the news of another historic legal decision on that date, when an Ontario Divisional Court dismissed the provincial government’s second attempt to stop the youth-led challenge to its greenhouse gas emissions reduction targets.  In “Youth climate case forges ahead after court affirms historic decision”,  EcoJustice describes that the case of  Mathur et. al. v. Her Majesty in Right of Ontario,  which has now become the constitutional challenge to climate change that has advanced the furthest in Canada.    

Some background: The case of Mathur et. al. v. Her Majesty in Right of Ontario was first brought by seven youth in November 2019, following the Conservative government’s passage of the Cap and Trade Cancellation Act. The plaintiffs, represented by Ecojustice and Stockwoods LLP, claimed that Ontario’s GHG emissions reduction target is insufficiently ambitious, and that the province’s failure to set a more stringent target infringes the constitutional rights of youth and future generations, under Canada’s Charter of Rights and Freedoms. In November 2020, the Superior Court of Ontario upheld the claims, in the decision which the provincial government sought to overturn. As of March 25, the case can now proceed to a full hearing, though no date has been set.  

Climate Change and the Right to a Healthy Environment in the Canadian Constitution is a legal article which appeared in the Alberta Law Review in 2020. The authors describe and contrast the legal approaches used in the Mathur case and in the LaRose case, which was dismissed by Canada’s Supreme Court in October 2020. Ecojustice has posted frequently on the case, and Alberta’s Environmental Law Centre also featured the Mathur case in a detailed blog in November 2020.

The first and most high-profile youth climate case in the world, is Juliana v. U.S. Government . A timeline is here, reflecting the progress from the initial filing in 2015 till March 9 2021, when Our Children’s Trust filed a motion to amend the complaint and adjust the remedy sought, after repeated roadblocks in the case.

Climate Youth in the Courts: Victory in Ontario, dismissal in Canadian court, and an appeal to the Supreme Court of Norway

The Environmental Law Centre of Alberta has been monitoring climate litigation cases worldwide, but events have overtaken their latest summary blog Climate Litigation in Canada and Beyond –Where Are We in 2020?  (Nov. 9) , which discusses the dismissal of the LaRose case in the Federal Court of Canada (more on that below). On November 12, Justice Carole Brown of the Superior Court of Ontario issued a landmark decision , allowing the case of Mathur et al.  to proceed to trial under Canada’s Charter of Human Rights and Freedoms.  The case is thoroughly described in a Backgrounder from the Ecojustice, who represent the seven youth. Their claim is that their rights were violated when the Ontario government under Doug Ford  passed the Cap and Trade Cancellation Act in 2018, weakening GHG emissions reduction targets for the province. According to Ecojustice, “The lawsuit aims to strike down Ontario’s current 2030 target as unconstitutional and enshrine the right to a safe, healthy climate as part of the right to life, liberty and security of the person in Section 7 of the Canadian Charter of Rights and Freedoms. This would require the Government of Ontario to set a new target in line with the scientific consensus, and revise its policies accordingly.”  The decision to allow the case to proceed is a first for Canada.

Federal Court of Canada dismisses an earlier youth-led case, LaRose vs. Her Majesty the Queen

On October 27, Justice Michael D. Manson of the Federal Court of Canada dismissed the case of LaRose vs. Her Majesty the Queen, and in the words of law professor Jason MacLean, slammed the door on big, “holy grail” climate cases in Canada. The LaRose case was filed in 2019 by 15 youth who used the Public Trust doctrine under section 7 of the Charter of Rights and Freedoms to argue that the federal government is violating their rights to life, liberty and security of the person, and failing to protect essential public trust resources. Further, they call on section 15 of the Charter regarding equality, alleging that  youth are disproportionately affected by the effects of the climate emergency.  Although Justice Manson agreed that “the negative impact of climate change to the Plaintiffs and all Canadians is significant, both now and looking forward into the future,” he declined to allow the case to proceed because the questions raised “are so political that the Courts are incapable or unsuited to deal with them.” Lawyers for the case will appeal.  The legal organizations supporting the LaRose case reacted to the decision: the Pacific Centre for Environmental Law and Litigation (CELL) here , and U.S.-based Our Children’s Trust here . Our Children’s Trust also maintains a timeline and compilation of documents here.

The LaRose case was summarized in “Kids facing effects of climate change are taking their governments to court” in The Conversation (Nov. 2019), with an explanation of the public trust doctrine.  After the decision, a brief summary appeared in  “Federal judge tosses youth climate case against Ottawa” (National Observer, Oct. 27). In  “Why the youth climate court case failed and what’s next for Canadian climate policy” (The Conversation, Nov. 3) Jason MacLean, Assistant Professor of Law at the University of New Brunswick, summarizes the case and concludes that the federal court’s decision “slams the door”, but also looks for broader hope in the prospects for more specific, smaller climate cases – referring to “The Unsexy Future of Climate Litigation” (Journal of Environmental Law, 2018) for his framework, and citing the current example of the Grassy Mountain coal mine project in Alberta as an example of such a specific case.

Previous attempts by Canadian youth to fight for climate rights in courts include ENvironnement JEUnesse, which is currently under appeal after being denied the right to proceed by the Quebec Superior Court in 2019 .

Rebellion is a new documentary episode by The Nature of Things, a flagship production of the Canadian Broadcasting Corporation. It profiles some of the youth involved in the Canadian court fights.

Youth in Norway take their climate case to the Supreme Court

In a case known as People vs. Arctic Oil , Young Friends of the Earth Norway (also known as Nature and Youth) have challenged their government’s 2016 decision to license oil drilling in the Barents Sea of the Arctic. Their challenge, now before the Supreme Court of Norway in November, is being described by Greenpeace Norway (a co-plaintiff),  as internationally precedent-setting, potentially as important as the Urgenda decision in the Netherlands. The New York Times reported on November 5  that it is  being called “the case of the century” in the Norwegian press. The court case finished in mid-November, with a decision expected in early 2021.

The Sabin Center Climate Case Litigation Database offers an archive of all official documents in the Norwegian case, and  Greenpeace Norway provides a chronology and a layman’s summary of the case decisions in English.  The Greenpeace website also provides the new information that the government’s decision to issue oil licenses was based on incorrect economic analysis and that  “Ministry of Petroleum and Energy has been sitting on updated calculations they did not present to the Parliament, which shows that the profitability of the oil fields is questionable.”    

Climate litigation in Canada – first youth, now Victoria B.C. may take to the courts

Two new articles describe the first examples of climate change litigation in Canada.  In “Climate change litigation arrives in Canada”, lawyers from Osler’s, a Toronto-based law firm,  summarize two example of climate change litigation to arise in Canada:  the claim by Quebec youth against the government of Canada, and the January 16 decision by the council of Victoria, B.C. to endorse a class action lawsuit against fossil fuel companies.  The second article appeared in Climate Liability News , and provides more detail about the municipal movement for climate accountability.

environment jeunesseAs the WCR blog reported when the case was launched in November 2018, the first Canadian lawsuit was filed by  ENVironnement JEUnesse (ENJEU)  in the Quebec Superior Court  on behalf of  people  under the age of 35 and resident in Quebec. They are claiming that the federal government has infringed on the rights protected by the Canadian Charter of Rights and Freedoms and the Québec Charter of Rights and Freedoms, by failing to take adequate action to prevent climate change. The  ENJEU website places their action in the context of the global litigation movement begun by the Urgenda case in the Netherlands, and the Juliana case in the U.S., and like them, faces a long road of legal procedures.

victoria harbourVictoria endorses a class action lawsuit for climate change damages: The more recent example of Canadian climate litigation comes from Victoria, the capital city of British Columbia, which on January 17 endorsed a class action lawsuit against oil and gas producers for climate-related harms. This is described briefly in the Osler article (Feb. 5),  in  “Next Climate Liability Suits vs. Big Oil Could Come from Western Canada”  in Climate Liability News on January 22, and in greater detail in a Globe and Mail article (Jan. 17).  Also in January, Vancouver city council voted to declare a climate emergency , and according to the Globe and Mail article, is considering  whether to join with Victoria in the class action lawsuit.  Also in January, the city of  Halifax in Nova Scotia became the third major city to declare a climate emergency  – with city staff tasked with figuring out how the city can set up a climate change directorate, with a goal of net zero carbon before 2050.

As both the Osler and the Climate Liability articles state, Vancouver and Victoria have been encouraged by the Climate Law in Our Hands campaign organized by West Coast Environmental Law – a campaign which began in 2017,  and has enlisted 16 municipalities to send “Climate Accountability Letters” to the world’s largest fossil fuel companies, asking that these companies pay a fair share of local costs related to climate change adaptation.  In September 2018, the Association of Vancouver Island and Coastal Communities  (of which Victoria is a member) sent a climate accountability letter on behalf of its 53 local government members.

Perhaps other Canadian municipalities should consider such actions.  “Evaluating the quality of municipal climate change plans in Canada”, first published online in November 2018  in Climatic Change,  catalogues and evaluates the strengths and weaknesses of climate change plans in eight dimensions, in sixty-three Canadian municipalities.  The conclusions: Canadian municipal climate change plans currently prioritize mitigation over adaptation; implementation, monitoring, and evaluation are relatively weak aspects ; and municipalities have given insufficient consideration to the element of stakeholder engagement in the climate change plan-making process.  Highest ranked cities were in Ontario:  Kingston, followed by the Waterloo Region, and Hamilton. New Westminster, British Columbia was identified as most needing improvement.