Against the backdrop of a meeting in Montreal of the Intergovernmental Panel on Climate Change (IPCC), Canada’s second-largest institutional investor said it was increasingly factoring climate risk into its decisions. The next day, demonstrators told the Caisse de dépôt et placement du Québec to step up the pace.
“What we invest in has carbon consequences, which we have to think about,” CEO Michael Sabia told a Montreal panel on impact investing last week. The Caisse, which invests pension funds for most of the province’s public sector, holds C$286.5 billion in financial assets. It is in the “early days,” he said, of introducing “carbon budgets”—representing the carbon emissions investments will trigger—to its decision metrics.
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“You have a risk budget, you have a carbon budget, and within that you have to make choices as to where you invest and how you invest,” Sabia said. “We don’t do that only because we think it’s important to make a positive contribution to what I think is a massive issue facing humanity, climate change, but also because it has an important financial dimension.”
Bank of England Governor Mark Carney leads an international Financial Stability Board that has urged investors and regulators to better account for their risk exposure in a carbon-constrained business environment.
Sabia’s assertion that a new climate sensibility reigns at the Caisse was put to the test within 24 hours, however, when more than 300 demonstrators rallied outside its Montreal offices to demand it disinvest from the fossil sector. Contrary to what Sabia’s remarks may have implied, they charged that the institution has actually bulked up on fossil securities in recent months, The National Observer reports.
According to Quebec citizen’s group Recycle ta Caisse, the institution’s $16.7-billion oil, coal and natural gas portfolio has grown 26.5% since 2015.
“I have three children and I can’t leave things like that,” Sebastien Collard, a neuropsychologist and spokesperson for the group, told the Observer. “Investments are a very important lever that can change things, so that’s why we have to tackle” the Caisse.
Greenpeace Canada campaigner Patrick Bonin roused cheers from the crowd when he linked the agency’s investment decisions to the wider panorama of a destabilized climate: “The Harveys, the Irmas, the forest fires we’re seeing in the West, like the flooding like we’ve had here—we’re going to have more if we don’t do anything.”
Bonin sought to spur Sabia’s motivation with an unmistakeable warning: “We’re going to rise up like what we did to shale gas, like what we did yesterday with TransCanada, which backed off of Energy East. We’re going to get Caisse to divest of fossil energy.”
