Open Letter to the Healthcare of Ontario Pension Plan

Open letter key points:

The burning of fossil fuels is driving the climate crisis.

The climate crisis is a health crisis: extreme heat, intensifying wildfires, poor air quality, mental health impacts and more.

HOOPP has made progress on handling climate-related financial risk, but still holds $1.6 billion in shares in risky fossil fuel companies.

HOOPP must phase out its fossil fuel investments.

Ontario Health Care Workers - Sign the Open Letter!

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Attn: Healthcare of Ontario Pension Plan Board of Trustees and Executive Team

A Healthcare Pension Should Be Healthy. Fossil Fuel Investments Are Not.

We have just lived through the hottest summer in human history, with wildfires, heatwaves and floods impacting our physical and mental health.

As healthcare sector workers, we are calling on HOOPP to immediately stop making any new investments in coal, oil, gas or pipelines, and to set a timeline to phase out investments in fossil fuels.

We were pleased that earlier this year our pension fund, the Healthcare of Ontario Pension Plan (HOOPP), released its climate plan, calling it “good for the Plan and the planet.” Unfortunately, HOOPP’s continued investment in fossil fuels is not good for the planet, or for our retirement savings.

We have a lot to be grateful for in HOOPP. It's a financially healthy, fully-funded pension that has held contribution rates steady for 19 years. It divested from tobacco a number of years ago as part of a commitment to global health.

Unfortunately, our pension fund is less healthy when it comes to investments in fossil fuels.

HOOPP recognized in its climate plan that the World Health Organization considers climate change the biggest threat to human health. Our pension fund explained that greenhouse gases are the main drivers of climate change, and that “the burning of fossil fuels is one of the primary sources of greenhouse gases.”

So why does HOOPP continue to hold shares in fossil fuel companies?

HOOPP’s investments in fossil fuels are at odds with our professions and our service to the public. We advise clients on how to handle medications that make them more vulnerable to extreme heat. We treat children with asthma aggravated by fossil fuel pollution and the smoke that comes with longer, more intense fire seasons. We support unhoused individuals who have had their belongings destroyed in floods. We counsel young people who are struggling with their mental health out of despair about the climate and their futures. 

In short, we see our patients and clients being impacted by the climate crisis, and it doesn’t make sense to us that HOOPP is investing our retirement savings in the very companies that are fueling this crisis.

HOOPP’s investments in fossil fuels also don’t make financial sense. Public healthcare workers are not highly paid, so having a reliable pension over the long-term is extremely important to us. But recent research demonstrated that the public equity portfolios of nine of Canada’s largest public pensions (HOOPP wasn’t included in the analysis) would have had higher financial returns if they had excluded oil and gas ten years ago. [1]

Betting on the fossil fuel sector might have made sense a generation ago. But today there is scientific consensus that stopping the worst impacts of climate change requires an immediate end to fossil fuel expansion and a rapid phase-out of existing production. The cost of wind and solar power is already cheaper than gas-fired electricity in Ontario. [2] And the war in Ukraine has actually sped up the transition to renewables. [3] It’s clear that fossil fuel profits have a non-negotiable expiry date.

To be sure, HOOPP has shown that it's starting to think about the connection between its investments and the climate crisis. HOOPP has committed to invest $23 billion in green investments by 2030. Our pension states that it uses its influence as an investor to encourage companies to decarbonize. We support HOOPP using its influence and capital on companies that have science-based, profitable paths to decarbonization. But fossil fuel companies do not: their business model is fundamentally based on extracting, refining, transporting and burning oil, gas and coal.

HOOPP’s climate plan showed our pension fund’s growing awareness of the financial risk of fossil fuels: the plan placed a limit, starting in 2025, on some types of new fossil fuel investment. But this limit doesn’t start until two years from now, contains plenty of loopholes, and says nothing about the (at minimum) $1.6 billion in shares in oil and gas companies that HOOPP holds today. [4] 

Fortunately, HOOPP’s done a lot of the hard work already by developing its first climate plan. Now we want to see our pension fund fill in the gaps: immediately stop making any new investments in coal, oil, gas or pipelines, and set a timeline to phase out investments in fossil fuels. We also want HOOPP to share more details about how it's influencing companies to decarbonize (for example by disclosing how it votes on climate-related shareholder resolutions), and to recognize that doing what’s good for the planet also means upholding human rights (for example by instituting an Indigenous Rights policy).

A healthcare pension needs to be healthy. That can’t include investing in the oil, gas, coal and pipeline companies that are fueling the greatest health threat we face. We know that our pension fund wants to do what’s good for the plan and the planet. But investing in fossil fuels isn’t it.

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This open letter is coordinated by Shift Action for Pension Wealth and Planet Health. Please direct any questions to info@shiftaction.ca. The letter will be shared with HOOPP's leadership and may be published as an op-ed. Read more about the background for this open letter here: Ontario health workers get a closer look at HOOPP’s $1.6 billion in oil and gas companies.

References used in the letter:

[1] "But recent research demonstrated that the public equity portfolios of nine of Canada’s largest public pensions (HOOPP wasn’t included in the analysis) would have had higher financial returns if they had excluded oil and gas ten years ago." See: https://www.corporateknights.com/wp-content/uploads/2023/03/Canadian-Pensions-Dashboard-for-Responsible-Investing-2nd-Edition.pdf, p.29

[2] "The cost of wind and solar power is already cheaper than gas-fired electricity in Alberta and Ontario."
See: https://cleanenergycanada.org/report/a-renewables-powerhouse/

[3] "And the war in Ukraine has actually sped up the transition to renewables."
See: https://www.nytimes.com/2022/10/27/climate/global-clean-energy-iea.html and https://www.reuters.com/business/energy/ukraine-war-accelerate-shift-clean-energy-bp-says-2023-01-30.

[4] "But this limit doesn’t start until two years from now, contains plenty of loopholes, and says nothing about the (at minimum) $1.6 billion in shares in oil and gas companies that HOOPP holds today."
See: https://drive.google.com/file/d/1WVsN8NoAgkYyC1ObvnVHDBgW4nBdoWo0/view
See also: https://investinginclimatechaos.org/data?org=Healthcare+of+Ontario+Pension+Plan