A European banking executive’s declaration that “to put it mildly, gas is over” is casting a pall over what should have been a moment of triumph for the Ontario Teachers’ Pension Plan (OTPP)—the release of a new net-zero emissions plan, just a month after the fund became majority owner of Italy’s second-largest natural gas pipeline network.

OTPP announced the new target Thursday, promising to increase its emphasis on “climate-friendly investments and solutions,” ensure that portfolio companies report their emissions annually, and work with those companies to achieve net-zero emissions by 2050. “Building on over a decade of climate change efforts,” the release states, “this is a meaningful decision that advances Ontario Teachers’ mission to deliver retirement security for its members, while creating a positive impact for its partners and the communities where it operates.”

“While the transition to the low-carbon economy presents many challenges, it also presents many opportunities to earn the returns we need to pay our members’ pensions while more broadly benefiting society and the environment,” said Chief Investment Officer Ziad Hindo.

The news landed just a day after European Investment Bank (EIB) President Werner Hoyer issued his stern repudiation of natural gas investments, in a presentation on his institution’s 2020 financial results. “To put it mildly, gas is over,” he told media. “This is a serious departure from the past, but without the end to the use of unabated fossil fuels, we will not be able to reach the climate targets.”

“Head of the European Investment Bank: ‘Gas is over.’ I’d say the message is starting to sink in,” tweeted 350.org co-founder Bill McKibben.

“June 2011, IEA: ‘Are We Entering A Golden Age of gas?’ Jan 2021, EIB: ‘Gas is over’,” added BloombergNEF founder Michael Liebreich.

The dots connect in an unfortunate way for Ontario Teachers’, after the fund announced in late December it had bought a 69.4% share of Società Gasdotti Italia (SGI), a 1,700-kilometre, high-pressure pipeline network that supplies gas for cities and industry. The system serves central Italy, and is the second-largest in the country.

 “We believe SGI’s network is well-positioned to benefit from and enable the shift to low- or zero-carbon alternatives like green hydrogen and biomethane to support broad decarbonization efforts in Italy and Europe,” Dale Burgess, the fund’s senior managing director for infrastructure and natural resources, said at the time.

Euractiv’s coverage of Hoyer’s news conference identifies gas as a “grey area” in the EIB’s drive for a 55% carbon reduction by 2030 and net-zero emissions by 2050, with the European Commission “saying it will still be needed to help coal-reliant EU member states transition away from fossil fuels”.

However, fossil gas “has limited support under the EIB’s climate roadmap. Only power plants emitting less than 250 grammes of CO2 per kilowatt-hour are currently eligible for support under the bank’s rules, and the EIB intends to pursue its decarbonization policy by phasing out all funding for fossil fuels before the end of the year.”

Dan Madge, the OTPP media relations officer listed on last week’s release, declined to comment for this story. But Hindo told the Globe and Mail the fund has no immediate plans to sell off its oil and gas assets, which represent about 3% of its C$205-billion portfolio.

“Fossil fuel is part of the fabric of the economic structure today. There is no, unfortunately, easy solution for the world economy to wean itself off that,” he said. “What we do recognize is the world is transitioning away from it. And our investment plan, of course, will evolve with that, as well. Hence, going forward, we will really emphasize investments in cleaner energy.”

Toronto-based Shift Action for Pension Wealth & Planet Health declared itself pleased to see Ontario Teachers’ take a “critical first step towards addressing the unprecedented risks the climate crisis creates for its beneficiaries and for our planet”.

However, the group warned, “a commitment to net-zero emissions has little credibility on its own without announcing the concrete steps the OTPP will take to achieve this goal. These details should have been released today. Without a plan for major changes to the way the pension fund makes investment decisions, a net-zero commitment runs the risk of becoming a cynical example of greenwashing.”

Along with the SGI purchase, Shift listed OTPP’s share of a $10.1-billion stake in a gas pipeline network in Abu Dhabi and its ownership of the controversial Bristol Airport in the UK as investments that run counter to its net-zero promise.

Shift called on Ontario Teachers’ to set exclusionary screens for new fossil investments to match its existing policies on tobacco and weapons, phase out all current fossil investments by 2025, set a 2030 deadline to decarbonize its portfolio, set “new and ambitious targets” for investing in “profitable climate solutions”, and require companies it owns to adopt their own emission reduction targets and refrain from lobbying against ambitious climate policies.