Statement from Shift Action for Pension Wealth & Planet Health on PSP Investments’ annual report and responsible investment report
Originally posted June 16, 2021 at https://www.shiftaction.ca/news-updates
For Immediate Release: June 16, 2021
Statement from Shift Action for Pension Wealth & Planet Health on PSP Investments’ annual report and responsible investment report
Toronto, ON - PSP's investment approach fails to acknowledge the scale and urgency of the climate crisis. PSP Investments has made early progress in putting in place the internal tools and processes required to assess and manage the financial risks of climate change. However, it is unclear how PSP is using this climate-related information to protect the pensions of more than 900,000 federal public servants and align their retirement savings with a safe climate future.
Leading pension managers around the world are creating plans to address the climate crisis through ambitious science-based net-zero targets, pulling out of investments in risky fossil fuels, and rapidly scaling up investments in climate solutions.
But PSP has no such plans-- no climate targets, no timelines for reducing its exposure to high-risk fossil fuel companies that are worsening the climate crisis, and no policies or plans to align its portfolio with the Paris agreement goal of limiting global heating to 1.5℃. PSP has also ignored repeated requests from its beneficiaries to ensure transparency through publishing the exposure of its portfolio to high-risk fossil fuels.
The climate crisis represents an unprecedented and existential risk to every sector of economic activity. Pension funds have a fiduciary duty to manage this risk. It’s past time that PSP established a long-term investment goal aligned with Canada’s international climate obligations while creating a clear and measurable short-term plan to achieve it. Federal pensions and our planet are at stake.
In the past year, PSP has:
Measured and assessed the climate-related financial risks to its portfolio, engaged with owned companies to reduce those risks, and identified climate-related investment opportunities;
Reduced the carbon footprint of its portfolio by 5 per cent below the previous fiscal year;
Increased its portfolio of renewable energy assets to $3.8 billion and its portfolio of “green assets” to $12.6 billion, although it neglects to explain exactly how its “sustainable infrastructure” and “sustainable forestry” holdings are aligned with a safe climate future .
However, without articulating clear decarbonization goals and timelines or enhancing disclosure, PSP has yet to take the necessary steps to align its portfolio with the Paris agreement. Today’s annual report and responsible investing report show that PSP has:
Ignored beneficiary calls to disclose the totality of its investments in oil, gas, coal and pipelines, even though it prominently showcases its renewable energy investments;
Increased the carbon intensity of its portfolio by over 8 per cent over the previous fiscal year;
Increased its investments in “energy” in its Credit Investments portfolio by nearly 250 per cent over the previous fiscal year;
Increased its investments in oil and gas in its Natural Resources portfolio by 77 per cent over the previous fiscal year;
Completely omitted any reference to its 2020 acquisition of AltaGas, a high-risk fossil gas company that is actively attempting to expand gas infrastructure in British Columbia, Nova Scotia, and the United States. PSP also omitted any reference to the doubling of AltaGas’ ownership stake in PetroGas, an oil and gas distribution services firm, in October 2020;
If PSP wants to be taken seriously as a climate leader, it must:
Immediately put an exclusionary screen on new oil, gas and coal investments;
Phase out all current oil, gas and coal investments by 2025;
Decarbonize its portfolio by 2040;
Establish ambitious targets for increased investments in profitable climate solutions;
Develop robust and transparent climate-related engagement criteria for owned companies that includes forbidding participation in and funding of lobbying activities that undermine climate policy, company reduction timelines for achieving zero-emissions, and linking executive compensation to measurable emissions reduction goals. The escalatory tool of divestment would be employed if these engagement strategies do not produce desired outcomes;
Announce a policy that adopts the United Nations Declaration on the Rights of Indigenous Peoples and respects the rights of Indigenous Nations to Free, Prior and Informed Consent of energy and industrial projects on their traditional lands.
Background Information
PSP Investments. Connecting to what matters - 2021 Annual Report. https://www.investpsp.com/media/filer_public/documents/PSP-2021-annual-report-en.pdf
PSP Investments. Connecting to the future - 2021 Responsible Investment Report. https://www.investpsp.com/media/filer_public/documents/PSP-2021-responsible-investment-report-en.pdf
For more information please contact:
Adam Scott, Director, Shift Action for Pension Wealth & Planet Health
adamscott@shiftaction.ca, 416-347-3858.
Patrick DeRochie, Senior Manager, Shift Action for Pension Wealth & Planet Health
patrick@shiftaction.ca, 416-576-2701.
Shift Action for Pension Wealth and Planet Health is a charitable initiative that monitors the fossil fuel investments of Canadian pension funds and works to protect pensions and the climate by bringing together beneficiaries and their pension funds to engage on the climate crisis.
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Originally posted June 16, 2021 at https://www.shiftaction.ca/news-updates