Pensions are something that young people spend little time thinking about, while for seniors, it is an important subject. Individuals young and old have little knowledge of how pension funds are invested, and almost zero influence on the choices made by people who manage Canadian funds that measure in the trillions of dollars.

Because the subject is complex and transparency is almost non-existent, major news services seldom write about pension fund investments. In British Columbia, there is little scrutiny of public pension funds by mainstream media.

Charitable organization Shift: Action for Pension Wealth and Planet Health issues an annual report card that evaluates the performance of pension funds on climate action.

Shift’s annual Canadian Pension Climate Report Card is an independent benchmark for evaluating the quality, depth and credibility of climate policies for 11 of Canada’s largest pension managers.

This second edition finds that despite incremental progress, Canadian pension funds remain off track, especially compared to international peers. Far more work is needed to ensure Canadian pension managers fulfill their fiduciary duty to invest in plan members’ long-term interests and protect Canadians’ retirement security in a pathway aligned with the Paris Agreement goal of limiting global heating to 1.5°C.

The British Columbia Investment Management Corporation (BCI) is not the worst, but it is not far off. BCI.

Shift’s scores for BCI:

• Paris Aligned Target — F

• Interim Targets — D+

• Climate Urgency — C+

• Climate Engagement — B

• Climate Integration — C+

• Fossil Fuel Exclusions — F

CBC today reported that Canada’s largest pension funds trail many of their international counterparts when it comes to shifting away from investments in fossil fuels.

But climate-friendly investment choices are not the only subject in the news today. Bloomberg reported:

Canadian pension funds have been among the world’s most prolific buyers of real estate, starting a revolution that inspired retirement plans around the globe to emulate them. Now the largest of them is taking steps to limit its exposure to the most-beleaguered property type — office buildings.

Canada Pension Plan Investment Board has done three deals at discounted prices, selling its interests in a pair of Vancouver towers, a business park in Southern California and a redevelopment project in Manhattan, with the New York stake offloaded for the eyebrow-raising price of just $1. The worry is those deals may set an example for other major investors seeking a way out of the turmoil too.

When fund managers invest in publicly traded securities, citizens can measure their performance. But those managers have moved to invest massive sums in places where the public cannot determine current values. Some of the investments are suspect.

Canada Pension Plan Investment Board (CPPIB) gurus just sold its 29 percent stake in New York’s 360 Park Avenue South for $1.

CPPIB also sold its share of Santa Monica Business Park at a discount of almost 75 percent from its initial investment. 

Many of the private equity firms popular with fund managers have questionable ethics but Canadian pension funds are among the largest private equity investors in the world. New York Times headlined: Private Equity Is Gutting America — and Getting Away With It:

Over the last decade, private equity firms were responsible for nearly 600,000 job losses in the retail sector alone. In nursing homes, where the firms have been particularly active, private equity ownership is responsible for an estimated — and astounding — 20,000 premature deaths over a 12-year period, according to a recent working paper from the National Bureau of Economic Research. Similar tales of woe abound in mobile homes, prison health care, emergency medicine, ambulances, apartment buildings and elsewhere. Yet private equity and its leaders continue to prosper, and executives of the top firms are billionaires many times over.

Pension fund managers have great capacity to do good by making ethical and sustainable investments. Too often those goals are minimized.