Canada’s biggest pension managers boosted their investments in the country’s major oil sands companies by 147 percent in the first quarter of 2021, raising questions about the funds’ committments to being environmentally responsible.
According to a Reuters analysis of U.S. 13-F filings, the cumulative investment of Canada’s top five pension funds into U.S. shares of Canada’s top four oil sands producers jumped $2.4 billion in the first quarter of 2021.
Much of the increase bucked a declining trend that had been going on since 2018. While some of the increase came from shares already owned, the funds also purchased additional shares.
USNews is reporting that the five funds, in order of size, are Canada Pension Plan Investment Board (CPPIB), Caisse de dépôt et placement du Québec (CDPQ), Ontario Teachers’ Pension Plan (OTPP), British Columbia Investment Management Corp (BCI) and the Public Sector Pension Investment Board (PSP), which together manage more than C$1.4 trillion ($1.2 trillion) in assets.
The oil sands companies that the Canadian pension funds were most invested in during the first quarter were Canadian Natural Resources (TSX:CNQ), Suncor Energy (TSX:SU), Cenovus Energy (TSX:CVE) and Imperial Oil (TSX:IMO).
Numerous governments, companies, institutions, and investors around the world have stepped up pledges to reduce climate-warming greenhouse gas emissions. Many large pension managers, including the New York State Pension Fund and Norway’s largest pension fund KLP, have exited oil sands companies.
Baystreet.ca is reporting that Canadian pension funds are under pressure to balance environmentally responsible investing while still maximizing returns on their investments. But, this is the same problem all funds are having and it comes down to making a choice – either the high-carbon oil sands industry or a cleaner environment.
A few Canadian pension funds say they are continuing to invest in oil sands companies to help them in transitioning towaed producing cleaner energy.
“We have a big problem with pension funds saying we believe in engagement, not divestment, but there’s no sign of this engagement,” said Adam Scott, director of pension activist group Shift. “The very act of owning them (oil sands companies) implies the funds do not support transition.”
