Statement from Shift Action for Pension Wealth and Planet Health on the Ontario Teachers’ Pension Plan’s 2021 Annual Report
For Immediate Release: March 25, 2022
Statement from Shift Action for Pension Wealth and Planet Health on the Ontario Teachers’ Pension Plan’s 2021 annual report
Toronto, ON - With the release of its 2021 annual report this morning, the Ontario Teachers’ Pension Plan (OTPP) solidified its position as a climate leader among Canadian pension funds. The OTPP has made laudable progress toward its 2050 net-zero target, reducing the emissions intensity of its portfolio by 32% between 2019 and 2021– nearly half-way to its interim target of 67% by 2030. The OTPP also reduced absolute portfolio emissions by 13% over the same period, while dramatically ramping up investments in climate solutions, including renewable energy, sustainable agriculture, electricity infrastructure and green bonds.
It is clear that the OTPP is listening to the growing number of teachers calling for their retirement savings to be invested in a safe climate future. With the exception of the Caisse de dépôt et placement du Québec, other Canadian pension funds must make dramatic progress on their approach to climate risk if they want to keep up with the OTPP.
However, the OTPP continues to have significant problems with transparency and credibility when it comes to reconciling its climate commitments with its investments in high-risk fossil fuels.
Despite hundreds of working and retired teachers asking their pension managers for an inventory of its holdings in fossil fuels, the OTPP has refused to disclose this information. The OTPP said in September 2021 that its “private exposure to oil and gas” is less than 3%-- or about $6.8 billion. But it is impossible for anyone outside of the pension fund to verify this claim, and the OTPP’s 2021 annual report further obscures its fossil fuel holdings. Previous annual reports explicitly broke down OTPP portfolios by sectors that included “oil and gas” and “gas transmission and distribution.” Yet the 2021 report replaces these sectors with terms that make a year-over-year comparison impossible, including “energy”, “energy and power”, and “power generation.”
The OTPP’s reporting also sidesteps disclosure of the Scope 3 emissions associated with its portfolio. The lack of Scope 3 emissions information is particularly problematic considering the OTPP’s significant ownership of fossil fuel assets, including:
100% ownership of HRG Royalty, an oil and gas land titles holding company that the OTPP bought from Cenovus in 2015 for $3.3 billion.
At least $200 million in Aethon Energy, a Texas-based private investment firm focused on direct investments in North American upstream oil and gas assets;
A 37.5% stake in SGN (Scotia Gas Networks), the U.K.’s second largest fossil gas distribution company;
An undisclosed stake in the state-owned Abu Dhabi National Oil Company’s fossil gas pipelines;
A 69.4% stake, in partnership with Macquarie, in Società Gasdotti Italia S.p.A (SGI), which owns and operates a 1,700-km fossil gas pipeline network in Italy;
A 15.8% stake in Puget Sound Energy, a Washington-based integrated electric and gas utility that derives two-thirds of its electricity from fossil fuels and is trying to build a fossil gas export facility in Tacoma.
The OTPP allocates entire web pages to its investments in climate solutions, but reports next to nothing about the high-risk fossil fuel infrastructure purchased with teachers’ retirement savings. For the OTPP’s net-zero target to be credible, it must be transparent on how its fossil fuel linked assets have credible, profitable, Paris-aligned transition plans. If it can’t do so, it should remove these assets from its portfolio.
Contact information for interview requests:
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.