Scotland’s largest council pension funds have shares worth more than one hundred million pounds in a controversial gas pipeline in Canada at the centre of protests by indigenous peoples and climate action groups.
An analysis by The Ferret reveals that Strathclyde Pension Fund and Lothian Pension Fund jointly hold 14,710,716 shares worth £104,961,258 in three firms – Shell, TC Energy and Mitsubishi – prompting calls by environmentalists for the funds to urgently divest to help tackle the climate emergency.
The pipeline is owned by TC Energy Corporation, a Calgary-based company formerly called TransCanada.
TC Energy has partnered with oil and gas corporations to build the 416-mile pipeline, which will cut through ancient forests, rivers and habitat vital for endangered species such as caribou.
The pipeline cuts through lands inhabited by the Wet’suwet’en nation, whose hereditary chiefs oppose the project and are locked in a legal battle with TC Energy and the Canada’s government led by Justin Trudeau.
In recent weeks, the Wet’suwet’en nation chiefs have been supported by other indigenous groups such as the Gitxsan and climate action activists. In a wave of dissent they blocked roads, barricaded access to shipping ports and occupied the offices of officials.
The dispute erupted in February when armed police officers using dogs enforced a court injunction and cleared indigenous activists who were blocking work crews accessing the Coastal GasLink project.
The LNG Canada project, based at a new facility in Kitimat, will take fracked gas from the Coastal GasLink pipeline and cool it in massive compressors. The liquefied gas will then be transported to Asia in ocean tankers.
Royal Dutch Shell, a public British-Dutch owned corporation headquartered in the Netherlands, owns 40 per cent of LNG Canada.
Petronas, is owned by the Malaysian government and has a 25 per cent share in the project. The Chinese government-owned PetroChina Company Ltd., the world’s third-largest oil and gas company, owns 15 per cent, as does Japanese multinational, Mitsubishi.
According to the British Colombia government, the LNG Canada project will emit four megatonnes of carbon emissions each year during its first phase — the equivalent of adding 856,531 cars to the road.
The majority of gas shipped through the Coastal GasLink pipeline will come from fracking. BC is the fastest growing natural gas producer in Canada, thanks to fracking.
The firms that Strathclyde Pension Fund (SPF) invests in are Shell, TC Energy and Mitsubishi.
SPF has 386,206 shares in Shell worth £9,190,963.63, 27,305 shares in TC Energy worth £1,148,052.80, and 1,229,400 shares worth £39,065,840.32 in Mitsubishi.
Lothian Pension Fund (LPF) invests in Shell, TC Energy and Petronas. The fund has 1,465,495 shares worth £34,994,053 in Shell, 91,110 shares worth £3,829,788 in TC Energy and 11,511,200 shares worth £16,732,562 in Petronas. These SPF and LPF investments amount jointly to £104,961,258.
The project "threatens pristine environments and would provide huge new sources of climate pollution". Ric Lander, Friends of the Earth Scotland
Critics of these investments include Ric Lander, of Friends of the Earth Scotland, who said the Canadian Government have “criminalised the Gixtsan and Wet’suwet’en First Nation peoples” to push through the pipeline.
He also said the project “threatens pristine environments and would provide huge new sources of climate pollution.”
Lander continued: “But there is no inevitability about the success of these projects. Across the world indigenous peoples and environmental activists are blocking polluting projects, from Canadian mega pipelines to new coal mines, and here in the UK halting the expansion of Heathrow Airport.
“In February we published data showing how over £700 million of the Strathclyde money was banking on fossil fuel polluters – a hugely embarrassing revelation for Glasgow as it prepares to host the United Nations climate talks in November. The Scottish Parliament pension fund also invests in Shell, one of the world’s biggest gas developers, despite having blocked fracking on Scottish soil.”
Simon Watson of Unison said his union has raised concerns regarding fossil investments from both a “climate change concern and security of investments”.
“Investments in the carbon industry may become stranded and lose value therefore threatening the pensions of 100,000s of council workers. Pension funds who continue with these investments are part of the problem when they could be part of the solution,” Watson added.
Pete Cannell of Scot.E3, a group of trade unionists, activists and environmental campaigners, said both funds should divest from fossil fuels immediately, citing “compelling ethical and practical reasons”.
“The recently published report of the Scottish Government’s Just Transition Commission cautions against simply off shoring Scotland’s greenhouse gas omissions and these investments do exactly that. If we are to take climate emergency seriously we need to act locally and stop financing the fossil fuel business internationally,” Cannell added.
He was backed by Patrick Harvie MSP, co-leader of the Scottish Greens, who said that institutions around the world “have already begun doing divesting from fossil fuel expansions such as those in Canada”.
He added it is “deeply alarming to see Scotland’s public custodians lagging behind like this”. “What’s worse, the recent review of Strathclyde Pension Fund actually dismissed divestment altogether,” Harvie continued.
However, a spokesman for Strathclyde Pension Fund defended its investments and said the fund has “consistently led among investors in supporting a just transition to a low carbon economy”.
SPF said that divestment from producers “does nothing” to address the climate emergency and is “neither far-reaching nor radical enough to mitigate the immediate and long-term risks that climate change poses for investors”.
“The fund is continuing to develop how it measures and analyses its carbon exposure and will fully integrate this with its financial modelling. This will allow it to set a clear objectives on climate change and steer future investment,” the SPF spokesman added.
“It is hard to see any coherent call for fossil fuel divestment in a case where our fund’s most significant investment is in one of the world’s leading players in renewable energy technology – with Mitsubishi having big stakes in solar energy in Canada and Japan and winder power in the United States.
“Although a lesser value investment, Shell has also worked with its investors to commit to emissions targets, with executive pay linked to delivering those targets.
“It also needs to be understood that natural gas plays a critical role in the green energy transition. It not only emits 50% less CO2 per unit of energy than a typical coal plant and up to 20% less emissions than gasoline per mile, but it also provides crucial baseload energy when wind and solar are not generating.”
A Shell spokesperson said: “We fully support the Paris agreement and the need for society to transition to a lower-carbon future. We’re committed to playing our part, by addressing our own emissions and helping customers to reduce theirs. We have already invested billions in a range of low-carbon technologies, from biofuels, hydrogen and wind power, to electric vehicle charging and smart energy storage solutions.”
Lothian Pension Fund, TC Energy and Mitsibushi have been offered the right of reply.
Photo thanks to iStock/fotokostic.
This story was updated on 17th March 2020 at 08.21 to specify that is is hereditary chiefs of Wet’suwet’en nation who oppose the project. The project is supported by some elected band councils along the route. According to TC Energy’s website, the firm has reached agreements with 20 First Nation bands along the project route although the rightful titleholders are the hereditary chiefs.