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How do we get investment funds and pensions off fossil fuels?

There’s the kind of voting you do every four years, and then there’s the kind you do every time you pull out your wallet. You keep X brunch place alive over Y, you tell ABC Co. you prefer its green cleaners to the competition’s.

Our public institutions do the same, but on a much broader scale with the money we pour into employee pension plans, Canada Pension, endowment funds and the rest.

The Ontario Teachers’ Pension Plan, for instance, prides itself on using its heft to support the consolidation of the Canadian coal industry. (The OTPP was, after all, the nation’s number-one investor in fossilized carbon).

Trouble is, that’s exactly the kind of dirty investment a growing number of students, teachers, doctors, church-goers and others are fighting as part of 350.org’s Fossil Free campaign. They’re asking institutions to pull their money out of Big Oil, Coal, and Gas for one central reason: it’s wrong to profit from wrecking the climate.

“We can’t stop global warming one pipeline, coal plant or fracking well at a time the numbers just don’t add up. At the same time that we’re working to stop these destructive projects, we need to loosen the grip that coal, oil and gas companies have on our government and financial markets.”

Even if you don’t work for a big institution, you can send the same message to your city councillor, church, mosque, temple or, hell, to the managers at your employer’s pension fund and the Canadian Pension Plan, telling them you don’t want your money going toward climate-destructive activities. We’re all beneficiaries of CPP – we should have a voice in where our money goes. You’ll find tools for action at Gofossilfree.ca.

Over 200 campuses have jumped on this campaign to date. So far, five colleges, one church, one NGO and one city, Seattle, have signed divestment resolutions.

Here in Canada, the Canadian Association of Physicians for the Environment has recently thrown its support behind divestment, warning that the health costs of dirty energy and climate change are reason enough to get your money out of fossil fuels.

Students on 15 Canuck campuses, including the University of Toronto, held actions two weeks back to call for an end to fossil fuel investments. Sign Toronto350.org’s petition to get U of T to divest from its single largest holding – $10 million in Shell – as well as all fossil fuels within five years.

Now, those in the know might remind us that administrators in charge of these investments have a legally binding fiduciary duty to make a maximum return on the money they’re given.

Adding environmental screens to those funds, like, say, one against fossil fuels, could land them in hot water. That’s what the OTPP said when teachers tried unsuccessfully to get the fund’s pension money out of Big Tobacco and Big Oil a few years back.

Ian Bragg of the Social Investment Organization points out that Alberta’s public sector pension manager has divested from tobacco, and the issue is really all about how financial managers interpret their fiduciary duty. Some are more conservative than others, but institutions can reasonable justify divestment for the sake of avoiding the long-term financial, environmental and social risks of climate change if they so choose.

A recent report by the UK’s Institute and Faculty of Actuaries says that, worst-case scenario, failing to factor in the impacts of climate change could mean “the assets of pension schemes will effectively be wiped out and pensions will be reduced to negligible levels.”

Last month the Canadian Centre for Policy Alternatives released a report on Canada’s Carbon Liabilities warning that pension managers are legally obligated to ensure the long-term sustainability of their funds for the future of young workers. It notes that since CPP has hundreds of millions in the Canadian energy sector, it’s exposing pensions to serious risk when the carbon bubble bursts.

Bragg notes that the socially responsible investment (SRI) industry tends to emphasize a corporate engagement model over divestment to try to improve companies’ environmental performance. Thus, even ethical/green funds still include “best in sector” oil and gas companies – and you may find it extra-hard to divest as an individual if you’re looking at switching RRSPs over to something a little less oily.

The folks at Sustainalytics say if you chose to divest, you can create portfolios without fossil fuel stocks. Check out Green Century Balanced Fund, Portfolio 21 Global Equity Mutual Fund and T.O.-based SolarShare’s Community Solar Bonds. Just be sure to let the companies/funds you’re dumping know you’re voting for a greener future.

Got a question?

Send your green queries to ecoholic@nowtoronto.com | @ecoholicnation

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