We Want a Safe Climate in Our Retirement!

How will today’s workers be able to enjoy a secure retirement if our basements are flooded with rainwater during heavy storms?

If our lungs are filled with wildfire smoke?

If our homes and apartments are unbearably hot in more frequent and severe heatwaves?

If our public services and communities are overwhelmed by the rising costs and impacts of the climate crisis?

For the sake of all workers hoping to one day retire on a safe and healthy planet, we call on our public pension funds to use their trillion-dollar investor influence to lead a rapid transition away from polluting fossil fuels and to work for a stable climate and a dignified retirement for all.

Add your voice! Sign the open letter below. The letter and signatories will be shared with pension fund sponsors and leadership and may be published as an op-ed.

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An open letter from Ontario public sector workers to the managers, sponsors and administrators of Canada’s public pension funds:

We are calling on Canada’s public pension managers to use their investor influence to lead a rapid economy-wide transition away from polluting fossil fuels. Our pension managers are investing for our retirement security -- and our retirement security depends on the urgent success of this transition.

As Ontario public sector workers, we are proud that our unions have won us pensions so that we can retire in dignity. But faced with government attacks on public services, an affordability crisis and a housing crisis, our chances at a dignified retirement are diminishing.

Yet there’s an even greater threat to our retirement security: the climate crisis. We’ve seen the disturbing changes that signal that our planet’s life support systems are breaking down. How will today’s workers be able to enjoy a secure retirement if our lungs are filled with wildfire smoke? If our basements are flooded with rainwater during heavy storms? If our homes and apartments are unbearably hot in ever more frequent and severe heatwaves?

How will workers afford retirement if food prices, already high, spike as crops are damaged by drought or floods? Or if we need to find new housing after a wildfire or hurricane? 

What sort of retirement will we face if the public services and communities we depend on are overwhelmed by the runaway costs and debilitating impacts of climate change?

Our pensions are in some ways part of the problem, but they can also be part of the solution. Public pension funds continue to invest our worker capital in coal, oil and gas, trying to make money off companies that are burning up the planet and undermining our retirement security. But our pension funds are starting to realize that as long as we keep polluting, we’re going to keep seeing more and more extreme weather. And that fossil-fueled extreme weather is hurting the people paying into those pensions, hurting the people receiving those pensions, and even hurting pension fund investments financially.

Analyses have shown that pension fund portfolios would have had higher returns if they had excluded shares in public oil and gas companies a decade ago (1). The financial risks of staying invested in fossil fuels will only escalate as science makes clear that huge amounts of coal, oil and gas reserves must be left underground and unburned in order to have a safe climate (2). Meanwhile, some pension funds are recognizing that their growing investments in renewables are boosting their returns (3).

Our pension funds must continue to shift our retirement savings out of the causes of the climate crisis and into the solutions.

We call on the Canada Pension Plan Investment Board and the managers, administrators and sponsors of Ontario public pensions (including the Ontario Municipal Employees Retirement System, Healthcare of Ontario Pension Plan, Ontario Teachers’ Pension Plan (OTPP) and University Pension Plan) to:

1. Immediately end any new investment in fossil fuel exploration and production.

2. Set a timeline for phasing out existing fossil fuel investments and/or winding down fossil fuel operations in a way that supports workers, families and communities through a just transition.

3. Fulfill commitments to invest in climate solutions and avoid investments in distractions (such as carbon capture and storage, fossil-based hydrogen or carbon offsets) that prolong and expand the use of fossil fuels (4).

4. Make climate commitments, aligned with Paris Agreement goals, that take into account all of the greenhouse gas pollution from pension portfolios (5).

5. Ensure all owned companies have science-based climate transition plans.

6. Stop (re-)appointing oil and gas company directors to the Boards of our pensions.

7. Advocate for and support ambitious climate policy that helps Canada and the world meet climate goals and provides certainty for investors.

Our pension funds should be investing in a dignified future for the workers who are contributing their savings from every paycheque. A retirement in a world of climate breakdown would be the opposite of dignified and secure. 

For the sake of all workers hoping to one day retire on a safe and healthy planet, we call on our public pension funds to use their investment influence to work for a stable climate and a dignified retirement for all.

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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 and signatories will be shared with pension fund sponsors and leadership and may be published as an op-ed.

References:

1. Analyses have shown that public pension fund portfolios would have had higher returns if they had excluded shares in public oil and gas companies a decade ago. See, for example, the Canadian Pensions Dashboard for Responsible Investing, 1st edition (p.22) and 2nd edition (p.29), and The Impact of Energy Investments on the Financial Value and the Carbon Footprint of Pension Funds, a 2023 paper which analyzed large public pensions in the United States.

2. Huge amounts of current coal, oil and gas reserves must be left underground and unburned in order to have a safe climate. See, for example, The atlas of unburnable oil for supply-side climate policies in the journal Nature Communications.

3. Meanwhile, some pension funds are recognizing that their growing investments in renewables are boosting their returns. For example, Quebec pension manager Caisse de dépôt et placement du Québec’s director of media relations said in February 2024, “In terms of the returns on our overall portfolio, over five years, our investments in renewable energy generated more than 18% while the oil producers in the index made around 8%” [translated from French].

4. Specifically, we call on our pension funds to avoid investments in distractions such as carbon capture and storage, “hydrogen-ready” gas infrastructure and carbon offsets.
-- Carbon capture and storage: Carbon capture and storage is an expensive technology that has failed to perform as promised and serves to delay the transition off of fossil fuels. See, for example, Carbon Capture and Storage: An unproven technology that cannot meet planetary CO2 mitigation needs by the Institute for Energy Economics and Financial Analysis.
-- Hydrogen: Hydrogen is not a credible or economical climate solution for use in home heating and/or as blending into fossil gas networks. These attempts to prolong the oil and gas industry do not have merit from an emissions reduction perspective and, in the case of home heating, would be far more dangerous and expensive. See, for example, Gas companies tell us mixing gas and hydrogen is a climate solution. New research shows it's not, and UK Government urged to rule out hydrogen heating, especially in rural communities.
-- Carbon offsets: The carbon offset market has not demonstrated that offsets result in permanent and additional removals of carbon emissions. In the majority of cases, carbon offsets have been revealed to be merely greenwashing that allow for continued carbon pollution and exacerbate violations of Indigenous rights and problems with land use, food security and biodiversity. See, for example, Revealed: more than 90% of rainforest carbon offsets by biggest certifier are worthless, analysis shows from The Guardian, and In-depth Q&A: Can ‘carbon offsets’ help to tackle climate change? from Carbon Brief.

5. We call on our pension funds to make safe climate commitments that take into account all of the greenhouse gas pollution from their investment portfolios, including absolute financed emissions and scope 3 financed emissions.