The new CEO of Canada’s pension investment fund says conventional energy (ie. oil and gas) will play a crucial role to lower emissions in the global economy moving into the future. He has no intention of “blanket divesting” from these companies.
“The planet will struggle to transition without the expertise of the more conventional energy players,” John Graham, CEO of CPP Investments, told a Canadian Club of Toronto webinar this week.
“We certainly have a view that organizations and investors that take time to really understand the transition of the real economy will be rewarded, and a view that many of these energy companies will be leaders going forward.”
CPP Investments represents the pensions of 20 million Canadians and has $497 billion of assets under management. Graham, who was appointed CEO in February, has a background in industrial research science.
He says it’s critical that CPP investments continues to play a role in lowering emissions “across the energy spectrum.” The fund has a policy of working with companies to reduce emissions rather than blanket divestment based on involvement in fossil fuels.
For example, Graham noted that CPP Investments founded Calgary-based Wolf Midstream in 2016. The company has expertise in conventional pipelines, which is “knowledge [that] can also be applied to new technologies that will help decarbonize the planet.”
Wolf Midstream built and operates the $900-million Alberta Carbon Trunk Line. The system in central Alberta captures CO2 from an oil refinery and a fertilizer plant and transports it to a mature oil field, where it is used to produce previously unrecoverable resources while being sequestered deep underground.
The Alberta Carbon Trunk Line is the world’s largest CO2 pipeline project. In 2020 – less than one year after starting operations – it achieved the capture and storage of one million tonnes of emissions, the equivalent of taking approximately 350,000 cars off the road.
Graham said CPP Investments’ new sustainable energies group, launched in April, builds on existing strengths in conventional energy, renewables and innovation. With $20 billion of assets already under management, “we’re quite keen to grow this group over the next few years,” he said.
“They’ll continue to have the mandate to invest in conventional energy, invest in renewable energy and invest in innovation and technology…There are incredibly knowledgeable scientists and engineers in the energy sector that are going to play a critical role in this planet’s evolution.”
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