by William MacCallum, OSSTF Member
The Ontario Teachers’ Pension Plan, in their annual report in April, 2016, acknowledged that the world is currently transitioning to a low-carbon economy. At the same time the Plan’s managers claimed that, from a risk management perspective, ‘engagement’ with fossil fuel companies is a better policy than divestment. At the annual general meeting, Bjarne Graven Larsen, Executive Vice-President, Investments and Chief Investment Officer, gave the example of his experience during his previous employment in Denmark, with the Danish energy company Dong being convinced to stop exploring for oil and invest heavily in wind turbines.
No similar examples of OTPP having this sort of effect on any fossil fuel company were given at the meeting, and it was stated that this ‘engagement’ philosophy was a long term proposition. This shows a staggering lack of understanding that time is no longer a luxury we have when it comes to climate change, and that the issue is bigger than the way they continue to try to frame it, as a ‘risk-management’ problem.
We at the Educators Climate Alliance say that if OTPP thinks that they can have more effect by “engaging” with fossil fuel companies, prove it. We expect to be informed specifically about what OTPP has accomplished to change the direction of fossil fuel companies at the next annual general meeting in April 2017. How many companies has OTPP convinced to pull out of the oil sands, or invest heavily in renewables, and where is the proof that it was the OTPP’s lobbying that actually caused them to change? Since the OTPP has stated that the world is currently transitioning to a low-carbon economy, it will not be good enough to claim, for example, that they invest in Shell, and Shell has announced that they will not drill in the Canadian arctic. These sorts of announcements are to be expected now that the world is transitioning to a low-carbon economy, so claiming these sorts of announcements as victories for their “engagement” philosophy would be disingenuous, unless proof is provided that the corporation acknowledges OTPP played a part.
Unless OTPP is able to convincingly demonstrate that their policy of engagement is directly influencing fossil fuel corporations to move away from the production of fossil fuels to burn, OTPP needs to publicly recognize, at the AGM in April 2017, that a new policy is needed. We suggest complete divestment from at least the 200 largest fossil fuel corporations.
To continue to argue that it is simply a risk-management issue shows a lack of courage and leadership. Even though the board of directors and senior management have acknowledged that they have duties beyond simply maximizing returns for pensioners, their actions speak louder than their words. These actions say that when our children and grandchildren realize in a few years that these leaders had the opportunity to help mitigate the effects of climate change sooner but chose the path of short-sightedness and selfishness instead, by framing the crisis as simply a risk-management problem, there will be no honest rebuttal open to today’s leaders of OTPP. Currently the only path to an ethically justifiable pension open to Ontario teachers is to take the commuted value of their pension prior to age 50 and invest it themselves.