Top pension plan investments include three oil and gas companies, Vancouver report indicates
The pension plan of municipal employees in Vancouver includes investments in fossil fuel, mining and tobacco companies, a report going before city council this week indicates.
Among the top 10 Municipal Pension Plan investments as of December 31, 2011 are Suncor Energy, Canadian Natural Resources, and ExxonMobil Corp, according to the staff report.
The pension plan that the city participates in has a membership of more than 280,000 members across the province, and investments are managed by the B.C. Investment Management Corporation (BCIMC).
The city’s only direct investments are with the government and banking sectors, a fact that Vision Vancouver councillor Andrea Reimer indicated she was encouraged to see.
But Green councillor Adriane Carr said she was “appalled” to read that the top pension investments include three major oil and gas companies and mining giant Barrick Gold.
“We’re trying to be a city that is in global leadership on climate change, and you know, Suncor, Canadian Natural Resources, ExxonMobil, I mean these are major companies that our municipal employees are investing their pension plan funds into,” Carr told the Straight by phone. “I am upset by realizing just how much of our money is tied up in companies that run completely counter to the goals of the city in terms of the ‘greenest city’ agenda.”
According to the report, the city and its employees contribute about $100 million annually to the Municipal Pension Plan. Contributions in 2012 to the plan included $56.2 million paid by the city, and $45.5 million in employee contributions.
The report notes that both the Municipal Pension Plan and BCIMC have fiduciary and legislative responsibilities “to maximize the return to plan members and make investment decisions based on these responsibilities”.
Other corporations in the top 10 municipal pension plan holdings as of December 31, 2011, include Toronto Dominion Bank, Royal Bank of Canada, BCE Inc, Canadian National Railway, and Apple Inc.
The top 10 global stocks include Chevron, which comprises 0.8 percent of global equity investments. Among the emerging markets equities investments are Petroleo Brasileiro, comprising 3.1 percent of emerging markets equity, British American Tobacco, at 2.8 percent, and Proctor & Gamble, at 0.9 percent.
Reimer, who brought the motion to council earlier this year seeking information on the Municipal Pension Plan, conceded that investments that counter the city’s environmental goals are “frustrating”. But she noted that taking steps to change the pension investments that municipalities across the province are signed onto isn’t a simple process.
“To me the next step is to sit down and talk with the pension fund about that question of what is your end game,” she said. “They have become members of the UNPRI (the UN Principles for Responsible Investment), and they have a framework for responsible investment, which is a good step, but to understand how many steps they’re committed to taking, any more steps, and where they expect to be at the end of taking those steps, and then figuring out if that aligns with where we’re at as a city.”
Reimer said any changes will require working with pension holders, other municipalities across the province, and public-sector agencies, which are also members of the pension plan.
“Every city now has signed on to the climate action charter, so therefore we all have goals about reducing climate emissions,” she said. “It would follow then that we wouldn’t want our money invested in activities that increase them, because it’s contrary to the policy goals.”
Carr questioned the effectiveness of the UN Principles for Responsible Investing, and said she would prefer to see a different approach to screen out certain kinds of companies.
“If we’re aiming to be the greenest city, we should be clearly saying to anybody who invests on our behalf, and certainly the city itself, we should not be investing in oil and gas and fossil fuels,” she said. “As a city we’ve taken a stand against an oil pipeline, we’ve taken a stand against any coal shipment out of our city. We should be following suit with where we invest.”
The staff report recommends that the city develop and implement a “positive screening process” during the next year for investing in Canadian banks and credit unions. It also calls for Vancouver to notify the municipal pension board of the city’s position on responsible investing, and to encourage the board to continue its advancement of responsible investing "to further align the MPP investment portfolio with the city’s mission, values, and the sustainable and ethical considerations outlined in the City’s procurement policy”.
“It needs to be a thoughtful, patient approach,” said Reimer. “Whatever is in that policy becomes a standard by which we can go to the pension fund and say well here’s a standard we’re holding ourselves to, we’d like to know that the money you’re receiving from us is being held to the same standard.”
Vancouver city council will consider the report at the standing committee meeting on planning, transportation and environment on Wednesday (October 9).