Shift urges pension funds to push the utilities they co-own to halt fossil fuel expansion and transition to sustainable energy. Credit: sdf_qwe/Shutterstock.

Canadian pension funds are being urged to reassess their substantial investments in natural gas infrastructure in light of the global push towards emissions reduction, according to a new report from climate advocacy group Shift Action for Pension Wealth and Planet Health.

The report highlights that nine of Canada’s largest public pensions have stakes in 22 gas-related companies, which operate a combined total of nearly 350,000km of pipelines worldwide.

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Shift’s report challenges the long-held view that natural gas investments are a safe, long-term bet, reported the Canadian Press.

Adam Scott, head of Shift, expressed scepticism about the gas companies’ transition plans to hydrogen distribution, citing cost, technical obstacles and physical limitations.

The report suggests that hydrogen’s role may be confined to niche applications where reducing emissions is particularly difficult.

Despite these concerns, Canadian pension funds continue to invest in natural gas infrastructure companies.

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Last August, the Canada Pension Plan Investment Board (CPPIB) invested $1.2bn (C$1.72bn) in Tallgrass Energy, a company with more than 16,000km of oil and gas pipelines in the US. While announcing the deal, the CPPIB (operating as CPP Investments) highlighted that Tallgrass is investing in initiatives such as hydrogen and renewable fuels.

In 2020, the Ontario Teachers’ Pension Plan acquired a 69.4% stake in Società Gasdotti Italia, which owns 1,700km of pipeline. While announcing this deal, Ontario Teachers’ Pension Plan mentioned the potential of using the network to transport hydrogen. However, Shift alleged that little has been said on this potential since then.

Shift urges pension funds to push the utilities they co-own to halt fossil fuel expansion and transition to sustainable energy. The report also suggests divestment from gas companies that do not align with credible decarbonisation plans and reinvestment in climate solutions.

The pension funds have resisted divestment calls but acknowledge the importance of working with oil and gas companies to reduce emissions while ensuring energy access.

The media outlet reported CPP Investments’ sustainable energies group head Bill Rogers as saying in a December 2024 commentary that selling off the holdings could result in the companies being acquired by those less concerned about the climate.