The Economic Case for Divestment
The study makes the economic case for divestment from fossil fuels, due to risk factors such as aggressive new climate policies. It is aimed at informing pension fund trustees about the risks associated with fossil fuel investments, and for interested workers who want to better understand what their pension money is up to, and how to ask the right questions.
A review of Canadian public pension fund annual reports found that action on climate change was not mentioned as a material risk to pension sustainability. Marc Lee and Justin Ritchie estimate the top 20 public pension funds have around 4-9% of their funds invested in fossil fuel stock. The study looks at the recent collapse of oil prices as a sign of things to come. The top 20 funds had estimated holdings of approximately $27 billion in fossil fuel company stock prior to the commodity price fall. This translates into losses of approximately $5.8 billion, a conservative estimate based on equities only.
