Whether or not you're one of the lucky ones with a registered pension plan, the fact remains that pension funds are some of the most powerful investors in the world. They control over $50 trillion in assets according to the OECD. Here in Canada, our "big 8" pension funds, alone, control $1.6 trillion.
The job of these funds is to provide a cozy retirement income for their members. But their investments are so large that they influence markets, can make or break industries, and shape the future. So what kind of future are they investing in?
According to Adam Scott from Shift, speaking on our latest podcast, Canada's pension funds are heavily invested in fossil fuels. Adam has been encouraging them to bring down their climate risk and to divest from oil, gas and coal.
Fossil fuel divestment? The idea was popularized in 2012, when the international charity 350.org launched its famous Fossil Free campaign. That organization now reports over 1000 institutional investors around the world that have pledged to not invest more than $14 trillion dollars in fossil fuels. (Recent example: Three NYC Pension Funds divest $4 billion)
The idea is that where the money goes, the future goes. And if your investments are tied up in fossil fuels, then they're bankrolling a future of climate change.
But is divestment the best way to accelerate the transition away from fossil fuels?
Dr. Tessa Hebb from Carleton University, also speaking on our latest podcast, says "not so fast". She uses examples, like a divestment misstep in the South Sudan in the 1990s, to highlight the strategy's shortcomings. So what's the right answer?
