Climate and Energy Analysis of BCI’s 2024-2025 Annual Report

On June 25, the British Columbia Investment Management Corporation (BCI) released its 2024-2025 Corporate Annual Report. The report continues the same pattern that has characterized BCI’s inadequate approach to climate change for years: relatively robust engagement of high-carbon companies, coupled with a stubborn refusal to make comprehensive climate commitments.

Still no net-zero commitment from BCI 

Despite achieving its partial 2025 interim emissions reduction target and deploying sophisticated tools to assess climate-related financial risks, BCI still refuses to commit its portfolio to net-zero emissions by 2050. Instead, BCI continues hiding behind tired excuses for its inadequate plan to protect BC pensions from the worst impacts of climate change. In June 2025, BCI's Jennifer Coulson offered some insight into the pension manager's resistance to making a net-zero commitment at the Canadian Investment Review's Global Investment Conference: "I don't think a lot of us even know what a net-zero portfolio looks like by 2050."

This admission from BCI's ESG lead misses the fundamental point about net-zero commitments. Yes, the exact pathway to 2050 involves uncertainties. But that's precisely why institutions need to commit now—to drive the urgent action required to limit global heating to as close to 1.5°C as possible. The ability of BCI to achieve its mandate and protect the retirement security of BC pension plan members depends on climate stability.

Coulson's uncertainty argument gets the timeline backwards. The commitment comes first, then the institution mobilizes its considerable resources to figure out the pathway. BCI's own success this year in exceeding its public equity emissions intensity reduction target—a 34% reduction versus a 30% goal using a 2019 baseline—proves the pension manager can set targets and develop methods to achieve them.

For an institutional investor managing the retirement funds of over 778,000 BC pension plan members, this is not the time to double down on an ineffective climate engagement strategy or celebrate the achievement of unambitious emissions intensity reductions. The world is halfway through the critical decade for climate action. Meeting initial goals should bolster BCI’s confidence that it can work faster to achieve the emissions reductions that are required to safeguard British Columbians' retirement futures.

While some governments and investors move backward, BCI must move forward.

BCI's annual report acknowledges a troubling reality: "support for climate policy rollbacks and increasing supports for fossil fuels in key political environments" is creating uncertainty for investors (p.68). Yet BCI has consistently demonstrated leadership in policy advocacy, supporting the release of the Canadian Sustainability Disclosure Standards and participating in public consultations on Bill C-59. The organization has also encouraged the adoption of sustainability disclosure standards in Korea, Mexico, Japan and Australia, while calling for effective methane regulation for the U.S. oil and gas industry (p.38).

BCI recognizes that global progress toward net-zero is stalling and has increased its public policy advocacy in response. When the world retreats from climate commitments, leading institutions must step forward to fill the leadership vacuum. BCI has begun to do so. But without substantive climate commitments of its own, it lags behind its Canadian and international peers.

BCI's largest client, the British Columbia Municipal Pension Plan (BCMPP), has already committed to net-zero by 2050 and set interim emissions reduction targets. It remains unclear how the BCMPP will be able to achieve net-zero by 2050 when its investment manager, BCI, refuses to do the same and the BCMPP’s assets are invested in BCI’s pooled funds with several other BC pension plans that lack net-zero commitments.

As BCI executives publicly ponder what a net-zero portfolio looks like and place unfounded faith in engaging fossil fuel companies, other Canadian pension funds are pressing forward with climate action. The University Pension Plan has committed to net-zero by 2040 and reduced its public equity fossil fuel holdings to just 0.05% of its portfolio. As a UPP executive explained at the same conference where Coulson recently spoke: "We think we need a stable climate in order to have the best opportunity to generate investment returns for our beneficiaries over the long term."

If a smaller fund like UPP can figure out what net-zero looks like and commit to achieving it, BCI can too.

BCI already leads on engagement. Now it’s time to lead where it matters most.

BCI is among the leaders in Canada’s pension sector when it comes to climate engagement, participating in thirteen Climate Action 100+ collaborative engagements with leadership roles across North America and Asia (p.40). BCI leads on policy advocacy, contributing to 22 ESG-related consultations (p.39) while many of its peers stay silent. BCI also leads on transparency, providing more detailed climate-related disclosures than many of its peers and obtaining independent assurance on its carbon footprint calculations (79).

However, BCI continues to invest in fossil fuel companies and infrastructure despite these companies showing no intention of transforming their harmful business models that undermine the retirement security of BC pension plan members. While BCI acknowledges that Climate Action 100+ has had limited success engaging with major oil and gas emitters, which "still require stronger climate transition plans" (p.40), it sidesteps a fundamental issue: fossil fuel companies have no incentive to develop credible climate plans because aligning with climate goals would undermine these companies’ core profit-making mandate. 

The evidence shows BCI's engagement strategy is failing. 

As of this spring, only 10% of the carbon-intensive companies in BCI's portfolio have mature net-zero aligned commitments, down from 25% in 2022. BCI says this is due to “fluctuations in the year-over-year composition and number of carbon-intensive companies and increased maturity requirements” (p.72). Faced with this deteriorating climate performance, BCI seems to have responded by lowering its own standards— reducing its 2030 engagement target from 80% to 75% of its highest-emitting portfolio companies to have mature net-zero commitments. Rather than admitting that engagement with fossil fuel companies is ineffective, BCI appears to be accommodating their resistance to change. BCI must be prepared to escalate its engagement strategies, including escalating to divestment, when dialogue fails to produce meaningful results.

The time for incremental progress has long passed.

BC is experiencing the devastating impacts of climate change in real time, including unprecedented wildfires, devastating heat domes, and flooding that has caused billions in damages. Climate impacts are not some distant threat for BC, but a current reality.

Yet BCI continues to lag behind other Canadian and international pension funds on its approach to the climate crisis. The members of BC’s public pension plans deserve an investment manager with climate leadership that matches the scale of the crisis. BC's public sector workers have waited long enough for their pension manager to lead on climate. The engagement groundwork is there. The institutional capacity exists. The climate urgency is undeniable. The time for BCI to commit to net-zero by 2050 and develop a credible, comprehensive climate strategy is now.