Nurses and other health practitioners in Ontario are dismissing their pension plan’s climate investment strategy as “greenwashing nonsense” and urging the Healthcare of Ontario Pension Plan (HOOPP) to defend public health by dumping its C$1.6 billion in fossil fuel holdings.
HOOPP is a “tragically literal example of investing in one’s own demise,” Dr. Doris Grinspun, CEO of the Registered Nurses’ Association of Ontario (RNAO), told The Energy Mix in a recent phone interview.
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On September 29, Grinspun and RNAO President Claudette Holloway published an open letter [pdf] to HOOPP President and CEO Jeff Wendling and the trustee board on behalf of the association’s 50,000+ members. They urged the pension fund executive to immediately stop any new investments in coal, oil, and gas, and to phase out all existing ones by 2025.
“The first mandate of a health professional is ‘do no harm,’” Grinspun and Holloway wrote, which puts HOOPP’s investment policy “at odds with RNAO members’ professional values and our commitment to serve the public.”
Health professionals in Ontario are increasingly attending to people who are greatly harmed, both physically and mentally, by the climate crisis, they added.
A pension industry leader in Canada, HOOPP serves 435,000 members with more than 630 employers across Ontario. And it does have a plan [pdf] to bring its portfolio to net-zero by 2050. “Our climate change strategy has been built on the belief of doing what’s good for our pension plan and good for our planet,” Wendling said in a release in March.
“Disingenuous double-speak” is Grinspun’s assessment of HOOPP’s assertions of fiduciary responsibility and concern for the Earth. She points to the $104-billion pension fund’s pledge to have “exclusions on new direct private thermal coal and oil exploration and production investments” in place by 2025.
That HOOPP’s climate strategy involves continuing to invest at all in new fossil investments is a non-starter for Grinspun and Holloway, who say that investment needs to stop now. “The scientific consensus is categorical: stopping the worst impacts of climate change requires an immediate end to fossil fuel expansion and a rapid phaseout of existing production,” they write in the letter.
HOOPP’s exclusion pledge also carries the caveat that the fund “may make exceptions for high-emitting assets with credible and fully costed decarbonization plans.”
In their letter, Grinspun and Holloway commend HOOPP’s commitment to putting $23 billion into accredited green investments by 2030. But they say it doesn’t cancel out the $1.6 billion in fossil shares the fund currently holds. “These holdings are incompatible with HOOPP’s stated priority, and they send the wrong signal about HOOPP’s credibility.”
If the HOOPP board is truly committed to a climate strategy that is good for the plan and the planet, the letter concludes, it will act now to invest health care workers’ retirement savings in a just and sustainable future, cease all new fossil fuel investments, and establish a timeline for phasing out the $1.6 billion invested in fossil fuels by 2025.
Engagement, Not Divestment
In a HOOPP “promise to members” posted on the fund’s website, roughly a week after the open letter was sent, the pension fund declared itself to be “guided in all [it] does by one singular purpose: deliver on the pension promise to the healthcare workers of Ontario, and continue to do so long term.”
It added that “HOOPP is guided in everything we do by one singular purpose: deliver on the pension promise to the healthcare workers of Ontario, and continue to do so long term.” When it comes to climate change, the message continues, HOOPP aims to ensure that its plan to manage climate risk is credible and science-based, and focused on the long-term financial health of its investment portfolio.
“HOOPP will fight climate change in support of members’ pensions and will do so through engagement and collaboration, not divestment,” the posting says.
“Divestment is not a magic bullet because divesting from a company does not reduce the carbon in the atmosphere, nor guarantee the next owner will decarbonize,” HOOPP’s director of media and communications, James Geuzebroek, told The Mix in an email. “As such, divesting may do more harm than good.”
Through engagement and collaboration, HOOPP intends to use its influence as a large investor “to steer companies towards credible net-zero plans,” the website adds. “Divesting may reduce emissions in our portfolio, but it will not reduce emissions in the real world. And we want to make a real-world impact.”
Climate Literacy In Question
But that engagement strategy will need a stronger foundation than it currently has, according to a January 2023 report by Toronto-based Shift: Action for Pension Wealth and Planet Health.
HOOPP has “no publicly stated climate expectations for owned companies and no disclosed climate engagement and escalation process,” Shift says. And it does not publicly disclose its individual proxy votes, “making it impossible for beneficiaries and stakeholders to ascertain how HOOPP voted on climate-related shareholder resolutions.” Its proxy voting guidelines are vague, mentioning neither the necessity of net-zero transition plans nor the importance of climate literate board oversight, Shift states.
And while HOOPP says it may “consider” voting against committee members/chairs “if a company is not adequately managing the risks of material environmental and social issues,” the term “adequately managing” is not defined.
Shift adds that HOOPP “does not publish biographies of its board members, has no public board competencies framework, and identifies no board members as having climate expertise.” One trustee, Nick Zelenczuk, also sits on the board of Teine Energy, an oil and gas exploration company based in Calgary. The only member with any formal claim to environmental or sustainability competency is Gerry Rochi, co-founder and CEO of carbon credit fund manager Green Power Action.
At last report, HOOPP had secured an external climate change advisor to support governance oversight, and has joined the investor-led Climate Action 100+ initiative, which aims to ensure that large corporate emitters take necessary climate action.
An early September op-ed post by Rocchi also specified that some of its board members have taken the Institute of Corporate Directors’ Governance of Climate Change course, and that more “external education will follow.”
Overall, however, Shift says HOOPP’s avowal to make a “real-world impact” on emissions continues to be undermined by its seeming lack of “climate urgency.”
“While HOOPP acknowledges climate change as a systemic challenge, it does not articulate the urgency or existential threat of the climate crisis; does not articulate that HOOPP’s investments affect the climate; and does not include the ambition to centre climate in its investment strategy,” Shift writes, in a review of HOOPP’s references to climate change across a range of documents.
Shift’s assessment of another multi-employer plan in Ontario, the University Pension Plan (UPP), suggests how far HOOPP will need to travel to demonstrate the requisite level of climate literacy, the advocacy group adds.
“UPP acknowledges that the climate crisis poses risks to its portfolio, that investors have a role in addressing the crisis, and that the crisis is urgent and existential,” Shift writes. “UPP clearly articulates double materiality: that the climate affects its investments and that how UPP invests affects the climate. UPP has articulated an ambition, determination, and responsibility to centre climate in its investment strategy.”
Oil and Gas Stocks in the ‘Dungeons’
HOOPP maintains its “one singular purpose” is to deliver on its pension promise to health care workers. “It is our fiduciary duty to you,” the pension plan writes on its website.
The RNAO’s Grinspun argues that “investing in a dying industry is not fiduciary responsibility,” adding that the security of generations is at stake in the pension plan’s climate response. “Many of the people that have these pension plans, have them also to secure the future of their families, their children, and their grandchildren”
As Corporate Knights reports in its latest Canadian pension dashboard for responsible investing [pdf]: “Given that climate change affects everything, including risk-adjusted financial returns, integrating climate change into fund management is a fundamental requirement for pension funds to meet their fiduciary responsibility.”
Climate change “is an existential financial risk for pensions, both in the short- and long-term, as well as at the investment and financial-system levels,” the guide adds. “Expectations for pension funds to adopt credible science-based targets (i.e., net-zero) and climate action plans, and for new financial regulation to level the playing field across the sector, are firmly grounded in the legal requirement to mitigate growing climate-related financial risks, and risks to the macro financial system.”
And there is financial gain in turning away from fossil investment to favour climate solutions, CK adds. “From a risk return perspective, it is notable that even the past year’s banner performance of oil and gas stocks was not enough to pull the category out of the dungeons when it comes to total returns over the past 10 years.” In contrast, 430 “green flag” stocks had a total market capitalization of $16 trillion and delivered a cumulative return of 368%, “illustrating “the significant opportunity cost of delaying portfolio shifts from high- to low-carbon assets.”
Enough ‘Greenwashing Nonsense’
The RNAO is not the only HOOPP employer pushing the fund to broaden its definition of its members’ financial interest. Other health professionals are applying pressure in another open letter, this one coordinated by Shift.
Like the RNAO’s message to HOOPP, the letter states that fossil investments are opposed to the values and responsibilities of health professionals.
“It is outrageous to be investing in fossil fuels at this point in human existence,” Signatory Christie McCallum, 66, a retired family physician who practiced for years at a community health centre in Toronto, told The Mix. She said her outrage has deepened since she learned about Canadian colossal fossil Suncor Energy’s widely-decried plan to drill in the wetlands adjacent to McClelland Lake in northern Alberta. HOOPP has significant holdings in Suncor, a company unrepentant about its hard pivot away from an earlier commitment to diversify into renewables. In October, Suncor CEO Rich Kruger defended his company’s retreat from “a bit of a disproportionate emphasis on the longer-term energy transition” in testimony before the Canadian parliament, adding that it wasn’t in the monetary interest of shareholders.
“Today, we win by creating value through our large, integrated asset base underpinned by oil sands,” Kruger said.
Registered physiotherapist and HOOPP beneficiary Lizzie Houlding, 25, said she signed the letter because she could not accept that her pension “would so blindly pursue short-term financial gains, primarily for the few fossil fuel elites, over our collective future.” As someone who works primarily with vulnerable kids who have complex medical backgrounds and disabilities, she said she knows her clients need a stable climate, clean air, stable temperatures, reliable water sources, and stable food and health care systems.
“They need stable supply lines that allow them to access equipment to help them walk, dance, and move,” Houlding said.
Registered nurse Nina del Junco, who was part of a HOOPP focus group meant to comment on its climate strategy before it was released, also signed the Shift letter. She said she worked long and hard to illustrate how HOOPP’s oil and gas divestment timeline was “insultingly long,” and how the fund’s argument for using its investing power to steer companies towards sustainable business practices was “lip service at best, when it comes to fossil fuels.”
Del Junco, 28, added that the fund’s assessment of the financial implications for the pension was not evidence-based. “And in the end, they went right ahead with their face-saving, greenwashing nonsense,” she wrote in an email.
“As a younger person—with retirement far away and honestly not that much confidence in being able to afford the cost of living in retirement no matter how well my pension performs—I’m more concerned about making sure the planet is still spinning when I get to retirement,” Del Junco added. “You can’t spend money if you’re dead.”
“Enough is enough,” Grinspun said, pointing to the same absurdity of investing in an industry that is imperilling life on Earth. She urged the fund to “divest now,” so that “instead of being a pariah, HOOPP may become an example for the world.”
The letter urging HOOPP to divest remains open for signatories, and can be found here.