Ontario Teachers’ Pension Stocks Up on Renewables; May Draw Down Oil Holdings Long-Term

3034706336_34cea88515_z

Ontario Teachers’ Chief Executive Officer Ron Mock told Bloomberg this week that that if the fund has a choice between buying a Prius or a Hummer, “we’re going to take the Prius every time.”

Of course, Mock wasn’t talking about cars: he was referring to the pension fund’s plan to increase holdings in wind, hydro and solar energy and draw down its oil holdings over the next 10 years – although Mock was adamant that traditional energy companies remain a strong investment.

From Bloomberg:

The fund has increased its holdings in wind, solar and hydro power to about C$3.5 billion ($2.62 billion) over the past three years from about nil, said Ontario Teachers’ Chief Executive Officer Ron Mock after an interview with Bloomberg TV Canada’s Pamela Ritchie.

“If we’re going to invest in something, if we got a choice between a Hummer and a Prius, we’re going to take the Prius every time,” he said, in reference to Toyota Motor Corp.’s hybrid car.

Ontario Teachers’ doesn’t want to find itself stuck with stranded energy assets, Mock said Wednesday. The Toronto-based fund prefers to invest in natural gas, and oil will become a smaller part of the portfolio over the next decade as it increases its position in renewables. The fund just appointed a vice president in charge of renewables globally, he said.

“If we have to pay pensions, we’re not going to shy away from” energy companies, he said. “This highly increased level of scrutiny around this risk component is starting to affect what we’ll invest in, who we’ll invest in, or whether we’ll walk away.”

Ontario Teachers’ isn’t rushing to divest from conventional energy holdings, which include Calgary-based producers such as Encana Corp., Suncor Energy Inc. and Canadian Natural Resources Ltd. The fund sees an opportunity to have a conversation about responsible corporate environmental stewardship, he said.

“I’d rather have a seat at the table and have a lot of influence and be able to push, than divesting and walking away because the truth of the matter is, they will find a replacement for our capital if we leave the table,” he said.

Ontario Teachers’ manages C$154.5 billion in assets.

 

Photo by ezioman via Flickr CC License Flickr CC License 

Share This Post

Recent Articles

Leave a Reply

Privacy Policy | © 2017 Pension360 and © 2014 Policy Data Institute | Site Admin · Entries RSS ·