Canadian banks, insurance companies, and pension funds may be uniquely vulnerable to shifting priorities as the global investment community moves off fossil fuel assets and embraces a low-carbon future, risk analyst Hamish Stewart suggested last week in The National Observer.
“For those investors who are wise to the risks and opportunities associated with climate change and the carbon-neutral energy transition agreed upon by world leaders, the future looks positive,” Stewart writes, citing recent carbon warnings from Bank of England Governor Mark Carney. But Canadian funds are “apparently oblivious to emerging consensus amongst the world’s financiers on the need for a global energy transition and concerted action on climate change.”
As a result, Canadian financial institutions “remain heavily invested in some of the most inefficient, carbon-intensive fossil fuel projects on the planet. Heavy exposure to oil production in the tar sands and high-cost coal mining and coal-fired power generation indicate that Canadian pension funds believe there will be no limit on how carbon is released into the atmosphere. And the risky fossil fuel assets keep piling up.”