A pumpjack works at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. THE CANADIAN PRESS/Jeff McIntosh

Carbon risk for Alberta’s public pension manager questioned

AIMCo says nearly $115 billion invested in carbon-intensive industries is on par with other funds

Alberta’s largest labour organization says public-service pensions are being used to prop up the province’s struggling fossil fuels industry at a time when many large investment funds are moving away from the sector.

“We’re afraid they’re going to use our pension savings to fund a political agenda rather than invest those funds in a way that’s responsible,” said Gil McGowan, president of the Alberta Federation of Labour.

The Alberta Investment Management Corp., or AIMCo, says its investment of nearly $115 billion it manages for 31 pension, endowment and government funds to carbon-intensive industries that could be affected by efforts to fight climate change is on par with that of similar funds around the world. It points to figures suggesting that risk is declining.

Other measures suggest the fund’s carbon footprint has increased by nearly two-thirds since 2015. One analyst has concluded that a portion of AIMCo’s funds set aside to invest in Alberta has largely been put into small energy firms — a sector lately fraught with bankruptcy and bad debts.

Earlier this year, one of the world’s largest investment groups, BlackRock, announced it would put climate and sustainability at the centre of how it decides to invest its $7-trillion fund. A survey of institutional investors by the University of Texas found more than half the managers of 439 banks, insurers and fund managers say climate risks are already a factor in their investment decisions.

Documents on AIMCo’s website suggest the amount of carbon generated by companies it invests in has grown significantly to 6.9 million tonnes of carbon dioxide in 2018 from 4.2 million tonnes in 2015.

For every million dollars AIMCo invests, it now produces 243 tonnes of carbon dioxide — up from 179 tonnes in 2015.

AIMCo spokesman Denes Nemeth said a third measure — carbon output per revenue generated — shows its risk is falling. The calculation concludes AIMCo is generating 194 tonnes of carbon for every million dollars its investments earn, down from 202 tonnes five years ago.

“(That measure) demonstrates clearly that AIMCo is trending downward,” he said.

READ MORE: MLA Ron Orr addresses concerns over Alberta Teachers’ Retirement Fund

No consensus exists on how to measure investors’ carbon exposure, but Nemeth said an international business group on climate risk disclosure uses the emissions-per-revenue method.

Nemeth points out those measures only cover equities, not other investments such as infrastructure or real estate. AIMCo says its renewable energy infrastructure investments have increased to nearly 20 per cent of its total portfolio in that sector.

Bob Weber, The Canadian Press

Alberta Pension Plan

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