The pension fund that underwrites retirement for B.C.'s firefighters, police officers and public workers is heavily invested in the oilsands, mining companies, defence contractors and big tobacco.
An evaluation of B.C. Investment Management Corp.'s (bcIMC) equity holdings has revealed how billions of dollars of public money is invested.
Although bcIMC's $32.5 billion in equity investments, the largest chunk of its total assets, are spread across dozens of companies ranging from Air France to billionaire Warren Buffett's Berkshire Hathaway, the pension fund also has holdings in large defence contractors such as Lockheed Martinand General Dynamics.
The fund, which invests on behalf of the province's teachers and college instructors, also had approximately $268 million in investment value spread between several cigarette manufacturers, including British American, Philip Morris International and Reynolds American, according to a report from 2011.
In a statement to BIV, bcIMC said "we expect the companies within our investment portfolio to be run in the best long-term interests of their shareholders. We are an active owner who works hard to engage companies to improve their [economic, social and governance] practices and disclosure regarding the organization's investment choices."
According to its website, bcIMC has started to "actively monitor and encourage" companies to practise and implement responsible environmental and social policies, and has supported a UN-led initiative for responsible investment practices.
Last week, Vancity credit union came under fire for mutual fund investments in Enbridge that were labelled "socially responsible."
Enbridge has come under intense criticism in recent months for its proposal to build the 1,177-kilometre Northern Gateway pipeline to ferry oilsands bitumen from Edmonton to Kitimat. Vancity has since said it would be "compelled" to re-evaluate its investment position in Enbridge if Northern Gateway proceeds.
B.C.'s public sector pension fund is also invested in Enbridge.
As of March 31, 2011, the value of bcIMC's investment in the pipeline company totalled $279 million.
The fund also has significant amounts of money invested in BP plc, which was responsible for the massive Gulf of Mexico oil spill in 2010.
In addition, bcIMC is invested in Canadian Natural Resources and Taseko Mines, which have proposed controversial pipeline and mining projects in the U.S. and B.C.
Ben West, a campaigner for the Wilderness Committee in Vancouver, called the investments "problematic."
"The pension plans are our money, and, quite frankly, I think the general public should have a bit more of a say as to what a good investment is," said West.
West and Forest Action Network spokeswoman Zoe Blunt (who brought the Vancity investment to light) said they would support a campaign to change bcIMC's choice of investments.
But what choice does the fund have if it hopes to generate a return for its shareholders?
Eugene Ellmen, executive director of the Social Investment Organization, which promotes socially responsible investing across Canada, said pension funds are somewhat limited in Canada in their investment choices.
"Pension funds have less room to manoeuvre on issues like this than mutual funds do, and even some of the socially responsible mutual funds invest very, very broadly in resource companies," said Ellmen, speaking strictly to investments in resource companies. "The reason for that in Canada is that resource companies make up a significant part of the Toronto Stock Exchange."
West argued that that's part of the problem.
"There's a good return on investment on these right now, but is this a good direction in the long run?" said West. "I think Canada in a lot of ways is going to be behind the curve if we don't start shifting toward the economy of tomorrow instead of pushing the economy of yesterday."
But Ellmen said bcIMC and Canada Pension Plan, which is also heavily invested in resource companies, are leaders in responsible investment and have implemented policies and hired staff to examine their portfolios.
"If plan members expect their pension funds to divest of resource companies that are involved in either controversial pipeline issues or forestry or mining issues, that's going to be a hard issue to make stick with the pension funds because of their limited ability to actively select stocks," said Ellmen. "Our advice to plan members is to communicate with their pension funds and when issues like this come up, ask them what they are doing to address issues." •
B.C. Investment Management Corp. at a glance (2011)
$86.9B:assets under administration
$32.5B: of that is in equity investments
475,000: the number of B.C. residents the fund invests on behalf of
