OMERS’ divestment of Exolum marks a major milestone for climate-aligned pensions
In a victory for long-term pension sustainability, one of Canada’s largest pension funds has entered into an agreement to sell its last known remaining privately owned fossil fuel asset.
Pension managers have long-term obligations to their members – obligations that are incompatible with the climate breakdown caused by the burning of fossil fuels. As of Shift’s most recent Canadian Pension Climate Report Card, OMERS had just one known privately owned fossil fuel asset remaining.
OMERS has held a stake in Exolum, a distributor and transporter of refined oil and aviation fuel in Spain and Britain, since 2016.
On May 22, Reuters reported that OMERS had entered an agreement to sell its stake.
OMERS’ decision makes sense from both a financial and a climate perspective. Much has changed since OMERS first invested in the company a decade ago.
Pension funds have begun to experience the financial impact from climate-related disasters – including, for OMERS, the closure of the Fairmont Jasper Park Lodge during the heartbreaking 2024 Jasper wildfire. Financial researchers have raised the warning of dire economic consequences for pension funds if global heating continues to intensify, while modelling has demonstrated that a successful transition would be best for pension fund long-term returns.
Likely in recognition of such factors, OMERS began to tilt its portfolio away from fossil-based energy systems some time ago, positioning itself to better contribute to the decarbonization of the real economy. In 2022, the fund exited its stakes in three fossil gas assets, including the largest gas-fired cogeneration plant in the United States. In 2023, it exited a fossil gas transmission operator, and in 2025 it divested its stake in a crude oil pipeline.
At the same time, OMERS continued to face challenges from its members about its remaining fossil fuel assets, including in its annual meetings, from municipal councils, and in appearances at the City of Toronto Infrastructure and Environment Committee.
As OMERS wound down its private investments in fossil fuels, the energy transition picked up speed. In 2025, clean power met all new electricity demand globally, and one quarter of all new car sales were electric – signals of underlying trends that would warn any smart long-term investor away from fossil fuel assets.
In this context, OMERS was right to divest from Exolum, a company that has dabbled in hydrogen and sustainable aviation fuels but which has a business model firmly dependent on the transportation, storage and distribution of refined oil. Responsible fiduciaries should pull their capital from companies that have no realistic credible and profitable transition plan.
OMERS now marks a major milestone: a private portfolio free of fossil fuel assets (to the best of Shift’s knowledge).
Amid what many view as misguided government pressure to invest in propping up fossil fuel production, it is critical that OMERS now keep its portfolio free of exposure to a sunset industry. Rumours are circulating that pension funds may be bidding on an LNG stake. But long-term investors who understand the financial, climate, legal and reputational risks of backing fossil fuels in 2026 should avoid putting members’ retirement savings into Canada’s potential LNG projects.
It’s imperative that OMERS keep moving forward, not backward. This means putting in place an immediate exclusion on any new investment in fossil fuels and a deadline for phasing out exposure to publicly traded fossil fuel companies.