Statement from Shift Action for Pension Wealth and Planet Health on the Ontario Teachers’ Pension Plan’s increased stake in Scotia Gas Networks

Originally posted August 3, 2021, at https://www.shiftaction.ca/news-updates

For Immediate Release: August 3, 2021

Statement from Shift Action for Pension Wealth and Planet Health on the Ontario Teachers’ Pension Plan’s increased stake in Scotia Gas Networks

Toronto, ON - The Ontario Teachers’ Pension Plan (OTPP) has a gas problem, and it keeps getting worse. 

Yesterday, the OTPP announced it’s investing even more of the retirement savings of Ontario teachers in fossil fuel infrastructure in the midst of a worsening climate crisis. The OTPP is increasing its stake from 25% to 37.5% in Scotia Gas Networks Ltd. (SGN), the second largest fossil gas distribution network in the United Kingdom. Notably, OMERS also owns 25% of SGN, while Brookfield Super-Core Infrastructure Partners will acquire a 37.5% stake from Scottish energy company SSE and the Abu Dhabi Investment Authority in the £1.2 billion (CA$2.1 billion) transaction.    

SSE’s sale of its stake in SGN completes the company’s plans to completely divest its gas assets and focus on renewable energy and electrification to align with a credible net-zero pathway. In contrast, the OTPP has spent the last year growing its portfolio of fossil gas assets, including the Abu Dhabi National Oil Company’s gas pipelines in June 2020, Italy’s second largest gas distribution pipeline network in December 2020, and Washington-based utility Puget Sound Energy, which generates two-thirds of its electricity from fossil fuels, last month. As of December 31, 2020, the OTPP’s Infrastructure portfolio alone was composed of nearly CA$2 billion in fossil gas pipeline assets.   

The OTPP’s latest foray into gas pipelines calls into question the credibility of its recent commitment to net-zero emissions by 2050. Hundreds of active and retired Ontario teachers have asked the OTPP for details on how it plans to meet its net-zero goal, but the pension fund has so far failed to release a plan while continuing to invest in risky fossil fuels. The OTPP claims without evidence that its increased investment in SGN reflects its commitment to somehow achieving net-zero, helping the U.K. achieve its ambitious carbon reduction targets, and providing the capital needed to accelerate the transition away from fossil fuels. SGN is engaged in pilot projects to feed green hydrogen through its pipelines and invest in district energy systems, but has no credible explanation for how “natural gas networks will play an important role in the transition of the energy sector to a net zero future.” 

Already, analysts in the U.K. have highlighted the financial risks of investing in fossil gas pipelines, as public pressure to accelerate climate action grows and deepens. In May, the International Energy Agency said that limiting global heating to 1.5℃ means there can be no investment in new fossil fuel supply projects from now on and an immediate phase-out of existing fossil fuel projects is needed. Similarly, leading research institutions in collaboration with the United Nations Environment Programme found that gas production must decrease by 3% per year between 2020 and 2030 to ensure a safe climate future. 

The OTPP continues to gamble the retirement savings of thousands of active and retired teachers on fossil fuel infrastructure like gas pipelines and unproven moonshot technologies like hydrogen, both of which are already being outcompeted by cheaper renewables. There are growing physical, transition, regulatory and reputational risks that could turn the OTPP’s investments in SGN and other fossil gas pipelines into stranded assets.  

Contact information for media requests:

Patrick DeRochie, 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 and climate-related 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 August 3, 2021, at https://www.shiftaction.ca/news-updates