By William MacCallum
In November 2015 Corporate Knights reported that the Ontario Teachers’ Pension Plan had “quietly decarbonized”. While they acknowledged other pension plans still had investments in the fossil fuel industry, it was claimed that OTPP no longer did. This was immediately followed by a report from the Canadian Centre for Policy Alternatives also in November 2015 painting a different story. The CCPA estimates that the fossil fuel content in the equities portion of OTPP’s assets is 5.6%, while among “all other asset classes” the fossil fuel content amounts to an estimated 12%.
The discrepancy (along with why the CCPA has used estimates) is perhaps partially explained by the manner in which the OTPP discloses its assets publicly. Only assets in excess of 150 million dollars are publicly disclosed by the OTPP. Upon inspecting the most recently disclosed list of OTPP’s holdings, there appear to be virtually no assets that are primarily in the fossil fuel industry other than a couple of foreign natural gas companies such as Scotia Gas, based in the UK. This would appear to be why Corporate Knights claimed that the OTPP had “quietly decarbonized”, even though it was in fact not exactly accurate.
The CCPA report uses estimates since a large fraction of OTPP’s assets is made up of “minor investments” with values of less than 150 million dollars. The names of these minor investments are not normally publicly disclosed by the OTPP. How the CCPA calculated their estimates is not divulged, but it is based on the latest available data, the OTPP’s 2014 annual report.
As well, OTPP announced on June 30, 2015 that they had purchased Heritage Royalty Limited Partnership (HRP), which holds a broad portfolio of oil and gas royalties in Western Canada, from Cenovus for 3.3 billion dollars. It is difficult to reconcile that purchase with the claim that OTPP has “quietly decarbonized”.
Not until April is the next annual report expected from the OTPP so we do not know the current situation. If they have in fact “decarbonized” you would think that they would be making a point of making it known publicly, unless they intend on re-investing in dirty energy. Instead the OTPP has claimed in the past they choose not to do any “screening” by industry, favouring an investment by investment approach. This claim of not screening though is questionable as the OTPP appears not to invest in certain industries such as tobacco and weapons. Is it time to treat the fossil fuel industry similarly? The Educators Climate Alliance believes it is.