Canada’s five largest pension fund managers have boosted investments in the country’s top four oil sands producers, Reuters reported, despite their recent commitment to reduce the carbon intensity of their investment portfolio. The report said that much of the increase came from the higher prices of existing owned shares, but these fund managers also bought new shares and reversed the declining trend since 2018.
According to the report, The cumulative investment of Canada Pension Plan Investment Board (CPPIB), Caisse de dépôt et placement du Québec (CDPQ), Ontario Teachers’ Pension Plan (OTPP), British Columbia Investment Management Corp (BCI) and the Public Sector Pension Investment Board (PSP), in the US-listed shares of Canada’s top four oil sands jumped 147% or $2.4 billion in the first quarter of 2021.
Canadian pension funds are under pressure to balance their efforts to protect the environment and maximize return. However, they are tempted by the rising share prices of Canada’s oil sands. Some of them argued that investment in these high carbon emitters could help them shift toward producing cleaner energy.
While the first-quarter figure showed higher exposures to oil sands, the annual report pointed out that three of the pension funds had decreased their exposure to the energy sector. CDPQ, OTPP, and PSP had cut their combined exposure to energy from CAD28.2 billion in 2019 to CAD22.2 billion ($18.4 billion) in 2020. On the other hand, CPPIB saw its fossil fuel exposure rise by 51.5% to CAD17.6 billion ($14.5 billion) by the end-March 2021, although it also increased exposure to renewable energy by 16% to CAD7.7 billion ($6.4 billion).
