Press Release - Pension plan members ask IMCO for clarity on its confusing fossil fuel exclusion policy
Toronto, ON | Traditional territories of the Wendat, Anishnaabeg, Haudenosaunee, Chippewas and Mississaugas of the Credit First Nation - Working and retired public servants from across Ontario sent a letter today to their pension manager, the Investment Management Corporation of Ontario (IMCO), seeking clarity on its confusing policy for restricting and phasing out investments in fossil fuels.
Members of Ontario’s Public Service Pension Plan, which is managed by IMCO, are asking the investment manager to answer six simple questions about its Climate Action Plan, released in November 2022. IMCO’s plan includes “climate guardrails” to “limit (IMCO’s) exposure to investments that are incompatible with a net-zero future” and “phase out new investment commitments in development of new unabated fossil fuel assets, in line with appropriate global, science-based scenarios and limit exposure to investments in thermal coal mining and arctic drilling”.
“As an environmental lawyer with decades of experience in climate and energy policy, I am totally unimpressed by IMCO’s so-called ‘climate guardrails’,” says Dianne Saxe, a Toronto City Councillor, environmental lawyer, former Environmental Commissioner of Ontario, and member of Ontario’s Public Service Pension Plan. “IMCO’s ‘climate guardrails’ don’t protect our retirement savings because IMCO is still investing hundreds of millions of dollars in companies that are producing the very fossil fuels that cause climate change and wildfires– and IMCO doesn’t intend to stop. In 2023, there is no responsible excuse for greenwashing and indecisiveness from IMCO, which has a legal duty to invest in the best long-term interests of 90,000 Ontario public servants. That includes giving us a fair chance to live in a survivable world.”
Pension plan members thanked IMCO for its commitment to net-zero emissions by 2050 or sooner, noting the $73.3 billion investment manager’s membership in the Paris Aligned Investment Initiative, pledge to invest 20% of its portfolio in climate solutions by 2030, and ambitious interim emissions intensity reduction targets. Plan members were pleased to see that IMCO also cites several science-based net-zero pathways in its Climate Action Plan, such as those developed by the Intergovernmental Panel on Climate Change and International Energy Agency. These authoritative international bodies are unambiguous: limiting global temperature increase to 1.5°C and avoiding the worst impacts of the climate crisis requires no new investment in fossil fuels and a rapid phase-out of existing production.
But IMCO’s climate guardrails dance around this scientific imperative and raise some unavoidable questions:
By how much and by when does IMCO want to limit its exposure to investments that are not compatible with a net-zero future?
What does it mean to “phase out new investment commitments”?
What does IMCO mean by “unabated fossil fuel assets”?
Why limit exposure to investments in coal mining and arctic drilling, but not other fossil fuel production activities?
“I’m hoping to collect my pension and enjoy my retirement many years from now, but that won’t be possible if our governments and financial institutions keep investing in the oil, gas, coal and pipeline companies that are causing the climate crisis,” says Ewa Shields, an Ontario public servant and member of Ontario’s Public Service Pension Plan. ”IMCO says its Climate Action Plan is consistent with limiting global temperature increase to 1.5°C, but its ‘climate guardrails’ are so weak, wordsmithed and watered down that they appear to be meaningless.“
Pension plan members also expressed conflict of interest concerns regarding the role played by IMCO’s Board Chair in reviewing and approving the Climate Action Plan and climate guardrails, noting that the Chair has a concurrent legal duty as a Director of one of North America’s largest oil and gas drilling companies.
Here is the text of the letter, which was sent to IMCO’s President & CEO, Vice-President for Responsible Investing and Board Chair, as well as the President & CEO and Chair of the Ontario Pension Board. Pension plan members are asking for a response from IMCO by July 31, 2023.
Background information:
IMCO’s Climate Action Plan (November 2022)
Shift’s statement on IMCO’s Climate Action Plan
Shift’s detailed climate and energy analysis of IMCO
For interview requests:
Adam Scott, Executive Director, Shift Action for Pension Wealth & Planet Health. adamscott@shiftaction.ca. 416-347-3858
Patrick DeRochie, Senior Manager. patrick@shiftaction.ca. 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. Shift is a project of MakeWay Canada.
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