The CPP: Net-Zero Promises, Billions Invested in Oil and Gas

Nov. 21, 2024

A senior pension fund executive sits on the board of an energy company opposed to emissions caps.

In the world of energy, Dave Chambers of Toronto wears multiple hats.

He sits on the board of Calgary-based Teine Energy, an oil and gas company that produces the equivalent of 46,000 barrels of oil per day. The company is collaborating with the Saskatchewan government to produce an oil and gas curriculum for high school students in an effort to teach them about the industry and provide work placements.

Chambers also works for the Canada Pension Plan Investment Board, or CPPIB, managing energy investments across North America. The board says it is committed to achieving net-zero greenhouse gas emissions by 2050.

A pension plan watchdog agency says there’s a problem here.

“You can’t have a director that has those legal obligations to different entities: one that is lighting the world on fire and the other that is supposed to be protecting our retirement security 30, 40, 50 years down the road from now,” said Patrick DeRochie of Shift: Action for Pension Wealth and Climate Health.

Shift tracks energy investment and climate policies of the country’s largest public pension plans, mobilizing beneficiaries to demand better action on climate from those managing their retirement savings.

Through their analysis, Shift found that CPPIB is a significant investor in fossil fuels, not just in Canada but globally, with a portfolio including oil and gas companies and fracking companies, as well as gas pipeline and distribution assets.

According to Chambers’ bio, he has been involved in CPPIB’s investments in other oil and gas companies including Nephin Energy, Black Swan Energy and Crestone Peak Resources.

Frank Switzer, the managing director of investor relations at CPPIB, declined to comment on the alleged conflict on behalf of Chambers, saying that Shift’s accusations were “ridiculous.”

Teine, which has operations in Saskatchewan and Alberta, did not respond to requests for comment.

DeRochie thinks the pension board has to look at the big picture of climate change.

“They have an obligation to ensure that an 85-year-old member of the fund and also a 20-year-old member of the fund are going to have a dignified retirement, retirement security in their old age, and that means they are required to assess different climate-related financial risks,” said DeRochie.

“Those risks are existential and systemic, so a fund that has a 10, 20, 50 years investment horizon has to properly manage climate risks and ensure that their assets and portfolio are aligned with the Paris climate agreement goal to limit global heating to 1.5 C or less.”

CPPIB declined requests for an interview, directing the Investigative Journalism Foundation to its website for information on its portfolio and net-zero efforts.

“At CPP Investments, we believe blanket divestment from oil and gas companies detached from investment considerations means losing our ability to enable the energy evolution and apply constructive influence through impactful engagement,” said a report from the CPP Investments Insights Institute.

CPPIB said it invests in “green and transition assets” to support the economy-wide transition to renewable energy. Green assets have to get at least 95 per cent of their revenue from “green resources” such as renewable energy and clean transportation. Transition assets are companies that fall short of the 95 per cent threshold or are in high-emitting sectors with decarbonization plans.

“They really are making massive investments in climate solutions like renewable energy or electric vehicles,” said DeRochie. “But at the same time they continue to hold this big portfolio of fossil fuel assets.”

DeRochie said that Shift focuses on oil and gas because the industry doesn’t have credible transition plans to achieve the goals of the Paris Agreement.

“The only way an oil and gas producer can align its business model with what’s required of the Paris Agreement is to phase out production,” he said. “I’m not familiar with any oil and gas producer that has expressed interest in phasing out production and transforming their business model away from fossil fuels.”

In a report from February, Shift gave the CPPIB lower scores than other Canadian plans on its climate report card in 2023 “due to a pattern of problematic public statements and new fossil fuel investments that are not aligned with a credible, science-based net-zero plan.”

In October, the CPPIB held its biennial meetings in eight cities across the country where members could come and voice their concerns. Shift reported that 7,200 Canadians submitted questions regarding investments in fossil fuels.

During a Nov. 4 meeting in Vancouver, a CPPIB executive said they are making efforts to address climate change risks.

“Climate change risk is an existential threat,” said Michel Leduc, senior managing director and global head of public affairs and communications at CPPIB. “We’re very well aware, whether it’s physical risks within the portfolio, whether it’s stranded assets, these are all major threats to our portfolio and it’s one that we are extremely preoccupied with.”

Angela Amato is an Edmonton-based Métis journalist with the Investigative Journalism Foundation and a Local Journalism Initiative reporter.

[Top photo: An oil refinery near Fort McMurray. The Canada Pension Plan Investment Board owns 90 per cent of a Calgary-based oil and gas company that signed an open letter calling for withdrawal of the federal oil and gas emissions cap. Photo via Shutterstock.]