Statement on the CDPQ’s oil producer divestment and new emissions intensity targets
SHIFT ACTION FOR PENSION WEALTH & PLANET HEALTH
For Immediate Release: September 28, 2021
Statement from Shift Action for Pension Wealth and Planet Health on the Caisse de dépôt et placement du Québec’s oil producer divestment and new emissions intensity targets
Toronto, ON - The Caisse de dépôt et placement du Québec’s (CDPQ) move to exclude investments in oil producers from its portfolio by the end of 2022 is a welcome and significant move that improves the CDPQ’s position as a climate leader among Canada’s major financial institutions. It is amazing that it took until 2021 for a Canadian pension fund to finally recognize that protecting our retirement savings from the worsening climate crisis inevitably requires abandoning market exposure to high-risk fossil fuels.
However, it should be acknowledged that if oil is too risky for the climate and Quebecers’ pensions, then so are ongoing investments in fossil gas. While gas may be less polluting than coal when burned, it remains a major source of climate pollution across the production supply chain. To achieve climate safety, investment in fossil gas production and infrastructure must also be urgently phased out. New research reveals that in order to have even a 50% chance of limiting global heating to 1.5°C or less by 2050, 59% of fossil gas must be kept in the ground and oil and gas production must be reduced by an average of 3% per year starting immediately. The CDPQ’s massive fossil gas infrastructure investments mean that it has not yet reckoned with this reality.
Shift also welcomes the CDPQ’s commitment to cut portfolio carbon emissions intensity by 60% below a 2017 baseline by 2030 and invest $10 billion to help decarbonize high-carbon industries. These interim 2030 targets are eclipsed in Canada only by a new pledge from the Ontario Teachers’ Pension Plan (OTPP) to cut portfolio emissions intensity by 67% below 2019 levels by 2030, with a 45% by 2025 interim target. But unlike the CDPQ, the OTPP has not yet explained how this two-thirds by 2030 reduction is possible without excluding fossil fuels from its portfolio.
Pension funds that are global leaders on climate, like Sweden’s AP1, have not shied away from excluding all investments in fossil fuels from their portfolios. Exclusionary screens and phase-out timelines for fossil fuel investments are an essential tool to reduce financial risks while charting a pathway to decarbonization. Exclusions are ultimately required for pension funds to fully align their investment strategies with climate safety.
We commend the CDPQ for taking this critical step that acknowledges that managing the financial risks of climate change for its beneficiaries means blacklisting oil producers from its investment portfolio. The CDPQ’s progress stands in stark contrast to the Canada Pension Plan, whose CEO said earlier this year that the Canada Pension Plan has no plans to institute a blanket screen on oil and gas during his tenure.
Shift also commends the Sortons la Caisse du Carbone Coalition, which has for five years mobilized the Quebec public and beneficiaries to call on the CDPQ to align its portfolio with climate safety and exit fossil fuel investments.
Background information on the CDPQ’s climate leadership
The CDPQ became the first major Canadian pension fund to set a net-zero emissions target in 2019.
Between 2017 and 2020, the CDPQ increased its low-carbon assets to $36 billion and reduced portfolio emissions intensity by 38%, exceeding its own targets.
The CDPQ reduced the number of shares it held in fossil fuel companies by 14% between 2016 and 2020. It committed in 2020 to wind down its investments in ExxonMobil.
The CDPQ credits its large and growing investments in wind and solar energy, including Boralex, Invenergy, Innergex, Renovables Iberia and Azure Power, with the particularly strong performance of its infrastructure portfolio in 2020.
The CDPQ’s compensation policy ties carbon footprint reductions to staff and employee compensation, incentivizing emissions reductions across the organization.
Background information on the CDPQ’s privately held oil and gas investments
The CDPQ owns a 35% stake in Transportadora Associada de Gás S.A., Brazil’s largest fossil gas pipeline network.
The CDPQ owns 49.5% of Corex Resources, a Calgary-based junior oil and gas company.
The CDPQ has a 16.6% ownership interest in the Colonial pipeline, the largest pipeline for refined oil products in the United States.
The CDPQ is 64.7% owner of Énergir, Quebec’s main fossil gas distribution network.
The CDPQ owns 79.9% of Southern Star Acquisition Corporation, the owner and operator of the Southern Star Central Gas Pipeline, a 9,300-km fossil gas transmission and storage network across eight U.S. states.
Contact information:
Adam Scott, Director, Shift Action for Pension Wealth & Planet Health
416-347-3858
Patrick DeRochie, Senior Manager, Shift Action for Pension Wealth & Planet Health
416-576-2701
Shift Action for Pension Wealth and Planet Health is a charitable initiative that 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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