The Union of BC Municipalities’s newest primer on climate action and the municipal pension plan shows MPP’s exposure to fossil fuels and its position on divestment.
For the $66.5 billion fund, the largest in Western Canada, 75 cents of every pension dollar comes from investment returns.
British Columbia Investment Management Corporation (BCI), which manages asset selection for MPP, does not recommend a divestment strategy saying it “reduces an investor’s ability to influence and to drive more sustainable outcomes and does not encourage companies to amend their policies and practices,” adding it would reduce MPP’s “investable universe.” BCI argues that engagement with corporations is a better strategy.
According to an August 2021 report from the Canadian Centre for Policy Alternatives, the Canada Pension Plan has increased its shares in fossil fuel companies since 2016. The report writers say fund managers are investing in companies that are “derailing” climate action.
Elsewhere, cities like New York City and Baltimore, Maryland, have made commitments to divest their billion-dollar pension funds from fossil fuels.
The primer, which will be debated at UBCM’s September convention, shows energy-related investments comprise 2.2 per cent of MPP’s total portfolio. At the end of 2015, four energy holdings – Suncor, Enbridge, Exxon Mobil, Canadian Natural Resources and TC Energy – numbered among the top 25 public equity holdings. At the end of 2020, only TC Energy remained in the top 25 holdings, representing $85 million in exposure.
MPP has nearly 400,000 members.
Rachelle Stein-Wotten, Local Journalism Initiative Reporter, Gabriola Sounder