Canadian pension funds are being urged to reconsider their significant investments in natural gas infrastructure, as the world increasingly focuses on reducing emissions. A new report from climate advocacy group Shift Action for Pension Wealth and Planet Health calls for action in light of the global push for sustainability.
The report reveals that nine of Canada’s largest public pension funds have invested in 22 gas-related companies, which collectively operate nearly 350,000 km of pipelines worldwide. Shift’s findings challenge the long-standing belief that natural gas investments are a reliable, long-term option.
Adam Scott, head of Shift, voiced concerns about gas companies’ plans to transition to hydrogen distribution, citing high costs, technical challenges, and physical limitations. The report suggests that hydrogen may only be viable in specific sectors where emission reduction is particularly difficult.
Despite these issues, Canadian pension funds continue investing in natural gas. Last August, the Canada Pension Plan Investment Board (CPPIB) invested C$1.72 billion in Tallgrass Energy, a company operating over 16,000 km of oil and gas pipelines in the US. When the investment was announced, CPPIB highlighted Tallgrass’s efforts to explore hydrogen and renewable fuels.
In 2020, the Ontario Teachers’ Pension Plan acquired a 69.4% stake in Società Gasdotti Italia, which owns 1,700 km of pipeline. While the plan discussed hydrogen potential at the time, Shift has noted little progress on this front since then.
Shift urges pension funds to push the companies they invest in to stop expanding fossil fuel infrastructure and instead transition to sustainable energy. The group also recommends divesting from gas companies without credible decarbonization plans and reinvesting in climate-friendly solutions.
Pension funds, however, have resisted calls for divestment, stressing the importance of collaborating with oil and gas companies to reduce emissions while ensuring reliable energy access. Bill Rogers, head of CPP Investments’ sustainable energies group, argued in December 2024 that selling off holdings could lead to these companies being bought by entities less committed to addressing climate change.
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