By Daniel Glick, The Story Group -March 22, 2019
For Globe and Mail subscribers
CPPIB’s fracking operation in U.S. raises questions
If there’s one holding in CPPIB’s $434-billion portfolio that brings the debate over investors and climate change into sharp relief, this is it.
CPPIB emphasizes its renewable-energy investments – $6.6-billion at the end of March, 2020, twice as much as the year prior. It calls the threat of climate change “one of the world’s most significant physical, social, technological and economic challenges.” Yet CPPIB, with $11.6-billion invested in conventional energy, still sees opportunities for big returns in oil and gas – including fracking, one of the most controversial parts of the energy industry.
“We don’t see any contradiction whatsoever,” said Michel Leduc, CPPIB senior managing director and top spokesman. The global transition away from carbon will be gradual, he said, with the International Energy Agency estimating that even with a “relentless focus” to reduce emissions, fossil fuels would fulfill 58 per cent of world energy demand in 2040 – down from 81 per cent in 2018. “To be abundantly clear, there are attractive opportunities in the oil and gas sector that remain today, and, we believe, into the future,” Mr. Leduc says.