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We Want a Safe Climate in Our Retirement!
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.