Pension Funds Have Legal Duty to Confront Climate Change
Canadian pension plans and plan managers may have a legal obligation to take public positions on climate risk, according to a study commissioned by the Shareholder Association for Research and Education (SHARE).
“Climate change risks must be taken into account, and pension trustees may protect the longer term interests of their beneficiaries by acting as effective public-policy advocates for climate change regulation,” states Toronto-based Koskie and Minsky, one of the country’s pension law firms.
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“The urgency of climate change, coupled with its potentially severe consequences, suggest that pension fiduciaries may engage governments on climate change issues to attempt to achieve a collective outcome that they are incapable of achieving alone.”
SHARE spokeperson Kevin Thomas said pension managers need a longer-term perspective than other investment executives. “The typical pension plan is thinking 70 years down the road,” and “they have to make sure their current and future beneficiaries are all taken care of,” he told CBC.
“In that kind of time frame,” Weber writes, “the report concludes that climate change creates a series of risks for investors. Those risks include regulatory change, extreme weather, access to resources, and costs of factors such as energy.”