Hi all,
We just released a new study, *Pension Funds and Fossil Fuels: The Economic
Case for Divestment,* by myself and Justin Ritchie. We find that Canadian
pension funds are living in a form of climate denial through their major
holdings of fossil fuel stock, and are thus exposed to risks from new
policies to address climate change. Our target audience includes pension
trustees and concerned plan members who want to better understand what
their pension money is up to, and how to ask the right questions.
In addition to climate policy, we outline a number of other risk factors
that could turn today's fossil fuel stock into tomorrow's stranded assets:
* Commodity price risk – As we have seen since mid-2014, low commodity
prices are hurting Canada's oil patch, a high-cost source in global terms.
* Energy innovation risk – Renewables, conservation and energy efficiency
may be better poised to meet new energy demand than fossil fuels.
* Carbon liability risk – Like tobacco, fossil fuel companies could be held
liable in the future for climate-related damages.
* First nations and community opposition risk – Fossil fuel mega-projects
are facing delays and opposition wherever proposed.
With all of this in mind we revisit the concept of fiduciary duty, and look
at some of the emerging alternatives, arguing that pension funds can and
should be part of the solution. And while our focus is on pension funds,
these same considerations apply to other institutional investors, such as
university endowments and foundations.
The full study is available here
<https://www.policyalternatives.ca/publications/reports/pension-funds-and-fossil-fuels>.
We gave an exclusive to the Toronto Star, and they published this article
<http://www.thestar.com/business/2015/11/16/ontario-pension-funds-lost-24b-from-oil-coal-investments-report.html>,
which leads with our estimates of losses to pension funds from the drop in
oil prices during the second half of 2014.
Please help us get the word out by circulating among your networks, and on
social media.
Cheers,
Marc
--
Marc Lee
Senior Economist and Co-Director, Climate Justice Project
Canadian Centre for Policy Alternatives, BC Office
604-801-5121 x228
Unifor Local 3000
