CALGARY — Environmental advocacy group Stand.earth has enlisted a high-profile law firm to warn six major pension funds against investing in liquefied natural gas megaprojects, saying climate-related and other risks could expose plan administrators to legal action.
The letter from Anne-Julie Asselin, partner at Trudel Johnston & Lespérance, was sent last week to trustees of the Canada Pension Plan Investment Board, Public Sector Pension Investment Board, Ontario Municipal Employees' Retirement System, Ontario Teachers' Pension Plan, University Pension Plan and Healthcare of Ontario Pension Plan.
Montreal-based Trudel Johnston & Lespérance specializes in class action and public interest cases, including a decades-long legal battle against major tobacco companies that resulted in a $32.5-billion settlement approved last year, as well as an ongoing fight against opioid makers.
Lawyers at the firm were also involved in a lawsuit over the defunct Energy East pipeline's potential impact on whale habitats in the Gulf of St. Lawrence.
"As the financial risks associated with fossil fuel investments become more significant, more foreseeable and better understood, prudence demands an increasingly rigorous assessment of those investments," Asselin wrote in the letter. "Disregarding such risks becomes more difficult to justify and may carry legal consequences."
She urged pensions to "refrain from investing, either directly or via a private fund, in LNG Canada, Ksi Lisims LNG or comparable Canadian LNG projects unless and until it can demonstrate, on the basis of a rigorous and transparent assessment, that such investments are consistent with its statutory and fiduciary obligations."
Stand.earth and its legal counsel had the letters drafted and ready to send when news broke last week that four pension funds plan to invest in LNG Canada.
U.S. asset manager Blackstone is leading a group, which includes CPPIB, OMERS, the Investment Management Corp. of Ontario and the PSP Investment board, planning to acquire a non-controlling stake in the Mitsubishi Corp. subsidiary that holds an interest in LNG Canada.
Asselin said it's not clear how final the Mitsubishi deal is, so the warning was still worthwhile.
"We will definitely be looking at what are the next steps, that's for sure," Asselin said in an interview. "We weren't expecting (decisions to make LNG investments) that quickly. And we were hoping that it would never happen."
LNG Canada is the first natural gas export facility to start up on Canada's West Coast. The partners, which also include Shell and Korean, Chinese and Malaysian companies, decided last month to go ahead with an expansion to double the output at the plant in Kitimat, B.C.
LNG Canada Phase 2 has also been deemed a national-interest project under federal legislation passed last year that aims to speed along new infrastructure.
Richard Brooks, climate finance director at Stand.earth, said attempts to communicate concerns directly with pension plans amid rumours they were looking to invest in LNG gained little traction.
He said the letters are "an attempt to remind them in the language that they should be paying attention to, which is legal language, about what they are accountable for and what they're responsible for."
He said the pension funds collectively manage $1.6 trillion in investments on behalf of millions of workers.
"There is probably no larger class in Canada than workers covered under these pensions," Brooks…
