British Columbia Investment Management Corporation (BCI), a prominent Canadian pension fund, faces criticism for its lackluster climate action. According to a recent report, BCI ranks as the second-worst performer among Canada's pension funds in addressing climate change. Despite some progress in climate engagement over the past year, the fund received a failing grade for not aligning its investments with the Paris climate accords, which aim to reduce emissions to net-zero by mid-century. BCI's significant stakes in fossil fuel companies and infrastructure highlight its ongoing commitment to these sectors, raising concerns about the fund's climate strategy.
The report card highlights BCI's substantial investments in fossil fuel companies and infrastructure. The pension fund holds a 26 percent stake in Czech Gas Networks and a 27 percent stake in National Gas. Furthermore, it maintains undisclosed stakes in Corex Resources and Connaught Oil and Gas, among others. As of September 2024, some of BCI's largest fossil fuel investments included $351 million in Canadian Natural Resources Ltd., $263 million in Enbridge Inc., and $118 million in ExxonMobil Corp. This continued investment in fossil fuels has resulted in an F grade for BCI, with at least $9 billion invested in the sector, an increase from $8.1 billion last year.
BCI manages roughly $240 billion in assets as of March 2024 and oversees insurance and benefit funds for over 2.5 million workers and retirees in British Columbia. The fund serves 740,000 participants in the province's public pension plans. Despite its size and influence, BCI has not committed to excluding new fossil fuel investments or ensuring that its privately owned fossil fuel infrastructure assets have a credible transition pathway. SHIFT, the organization behind the report, criticized BCI for its stance, stating that "making matters worse, BCI has yet to announce any exclusion on new fossil fuel investments and seems determined to ignore the fact that many of its privately owned fossil fuel infrastructure assets lack a credible transition pathway."
In response to these criticisms, BCI acknowledges its role as a large institutional investor and its responsibility to use this influence effectively. The fund's annual report emphasizes its intention "to help avoid the negative long-term economic outcomes that may result from climate change, which is crucial for meeting our long-term return objectives." BCI also expressed its belief that "an orderly transition to a low-carbon economy that is aligned with a net-zero (1.5 C) scenario will ultimately benefit our client's portfolios."
BCI's climate record was evaluated alongside the Canada Pension Plan Investment Board (CPPIB), which manages $675 billion in assets. The SHIFT report cited recent research from Ortec Finance, which found that CPPIB's projections underestimate the impact of climate change on Canadian pension funds. Under a scenario where global temperatures rise by 3.7 degrees Celsius by 2100, Canadian pension funds could experience a 40 percent decline in investment returns by the late 2030s.
SHIFT's report raises questions about the long-term sustainability of BCI's investment strategy. The organization refers to BCI as "the adults in the room," suggesting that it should lead by example in addressing climate risks associated with fossil fuel investments. The report calls for stronger commitments from BCI to divest from fossil fuels and align its investment portfolio with climate goals.
