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Pension Forum Investigates the Role Private Equity Plays in Exacerbating the Climate Crisis

May 21, 2021 (Investorideas.com Newswire) The University of Washington’s Harry Bridges Center for Labor Studies hosted a forum Wednesday that explored the relationship between pension funds and other institutional investors, the climate crisis, and the impacts on communities and the environment. Trustees and representatives of dozens of investors with more than $10 trillion in assets combined participated in the forum.

Moderated by Michael McCann, the University of Washington Gordon Hirabayashi Professor for the Advancement of Citizenship, panelists spoke of the growing urgency to interrogate the role private equity plays in exacerbating the climate crisis, often using pension fund capital.

Treasurer of the British Columbia Government and Service Employees’ Union Paul Finch said at the forum, “What doesn’t get measured doesn’t get managed. And we need to better understand what the risk is and we need better measurements of investment risk. We need less blind trust of investment agents. We need to appoint more critical thinkers to these pension boards who are equipped and educated with the tools to be able to understand the risks that exist.”

Panelist Sleydo’ (Molly Wickham) aEUR” Gidimt’en Checkpoint Spokesperson on Wet’suwet’en Territory, British Columbia, said, “Our resistance creates huge instability and risk to investors. We know that [KKR’s] Coastal Gas Link project has been delayed for at least one year and many seasons due to direct action and the requirement of added infrastructure throughout the pipeline route.

“We will never stand down and will continue to resist this project and others like it that do not gain consent from our people. It is a bad investment that will never see the returns that pensioners deserve.”

Participants discussed how labor unions, pension fund trustees, and Indigenous rights and grassroots organizations are working to encourage climate-safe investment practices and explore avenues for further collaboration.

Finch said, “What we found is that if people don’t have the tools to properly measure what’s happening in the markets, then they’re not able to make informed decisions in the best interest of their members or their beneficiaries. Across the board, the risks associated with these [fossil fuel] investments are not being properly analyzed or understood. Since divesting [from fossil fuels] our union has approximately earned, net of fees, 12.5 percent on the market, on average, every year.”

Even as the US has rejoined the Paris Agreement, and the Biden Administration is advocating for greater investment in clean energy infrastructure, and as publicly traded companies begin to commit to net-zero emissions, private equity firms aEUR” such as the Blackstone Group, KKR & Co., and the Carlyle Group aEUR” continue to acquire fossil fuel assets, contributing to the climate disaster we are experiencing.

Earlier this week, the International Energy Agency (IEA) released a groundbreaking report that stated that in order to achieve a net zero energy system by 2050, from today, there should be “no investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants.”

Private Equity Stakeholder Project Climate Director Alyssa Giachino told forum attendees, “There is a universe of economic actors outside of the public markets aEUR” like private equity — that are finding buying opportunities in assets shed by publicly traded companies. Absent pressure and real accountability, private funds managers will continue to invest institutional investors’ capital in oil and gas despite the risks. The public needs real information to hold private equity accountable to the impacts they have already had on the environment and marginalized communities.”

Mitch Vogel, Trustee of the Illinois State Universities Retirement System and Eileen Moran, member of the Environmental Justice Working Group of the Professional Staff Congress – CUNY also participated on the panel.

You can watch the recording of the forum here.

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