Study scrutinizes investment in fossil fuels

One of Canada’s largest pension fund’s continued and increasing investment in fossil fuels does not support the widely held goal of limiting global warming to 2°C above pre-industrial levels, says a new report by University of Victoria and University of British Columbia researchers affiliated with the Corporate Mapping Project, a six-year research and public engagement initiative.

In the report, “Canada’s Fossil-Fuelled Pensions: the case of the British Columbia Investment Management Corporation,” UVic political ecologist James Rowe, UVic sociology graduate student Zoe Yunker and UBC geographer Jessica Dempsey examined the investment practices of BC Investment (BCI), the fourth largest pension fund manager in Canada.

“It is widely accepted that to avoid dangerous sea level rises, drought, extreme weather and species extinction, the Earth’s average temperature must not exceed 2°C above pre-industrial levels,” says Rowe. “Yet our findings indicate that by continuing to invest heavily in fossil fuels, BCI’s strategy does not reflect the urgency of the climate crisis and is avoiding the strong action needed to forestall 2°C warming.”

“Pension beneficiaries and the general public have a right to know that BCI’s carbon-heavy portfolio does not support the economy-wide changes that are needed to address the climate crisis,” says Yunker.

As energy systems shift away from fossil fuels, the report says that investors who do not respond could be left with “stranded assets” or investments that are no longer profitable. “BCI’s duty is to act in the best financial interests of plan members. Its carbon-heavy holdings, however, raise questions about BCI’s management of these interlinked climactic and financial risks,” says Rowe.

The Corporate Mapping Project is investigating power dynamics within the fossil fuel industry, and is jointly led by UVic, the Canadian Centre for Policy Alternatives and Parkland Institute.

Funding for this research was supported by the Social Sciences and Humanities Research Council of Canada.

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