Four of Canada’s largest pension schemes are heavily owned by European pipeline or gas distribution companies serving countries dependent on Russian gas flows. Pensions, all of which have announced they will divest Russian investment in the wake of the country’s invasion of Ukraine, will not make a similar exit from those holdings, however. In response to questions from The Globe and Mail, several of the pensions did not explicitly confirm that these companies were in fact transporting gas from Russia. In many cases, companies simply carry the gas to customers, without saying where it comes from or where it goes. They all said that the companies they own are incapable of taking action against Russia in the absence of government sanctions or other regulatory intervention. The Ontario Teachers’ Retirement Program owns 69% of the shares of Societa Gasdotti Italia, Italy’s largest gas transmission network. Italy imported 40% of its natural gas from Russia in 2020, according to research firm Eurostat. The pension plan acknowledges that “a small percentage” of the gas it carries “is likely to come from Russia”. British Columbia Investment Management Corp. It owns 32 percent of Open Grid Europe, a 12,000-kilometer pipeline that carries about 70 percent of Germany’s gas volume. Its customers include gas producers and traders, network operators and large industrial facilities. Germany imported 59% of its natural gas from Russia in 2020, according to Eurostat. Polish PM seeks to reassure citizens over gas supply after Russia suspends operation of Poland and Bulgaria What lies behind Putin’s decision to cut off Russian gas to Poland and Bulgaria? BCI also owns 26 percent of the Czech Republic’s gas network, the largest gas distribution network in the Czech Republic. The company’s network transmits natural gas to consumers. The Ontario Municipal Employees Retirement System (OMERS) owns 50 percent of Net4Gas, the Czech Republic’s gas pipeline operator. The Czech Republic imported 86% of its natural gas from Russia in 2020, according to Eurostat. And the Caisse de dépôt et placement du Québec owns 20 percent of Fluxys SA in Belgium. The country imported just under 8% of its gas from Russia in 2020, according to Eurostat. However, the Institute for Energy Economics and Financial Analysis, a US think tank that promotes the transition to sustainable energy, says the Fluxy terminal at Zeebrugge transports Russian liquefied natural gas around the world, “contributing to Russian profit margins. fossil fuel projects. “ For the funds, which rushed to announce their disinvestment from Russia after its invasion of Ukraine, the ownership of their pipelines shows that it is not so easy to prevent Canadian retirees from benefiting when Russia is financially supported. Russia’s continued export of gas and coal has kept its economy afloat and has taken over the war in neighboring Ukraine, which has been waged in defiance of global condemnation. It also shows that pensions are at financial risk: The Russian invasion has forced European nations to question their dependence on Russian energy and to investigate the reduction or elimination of Russian supply. In the long run, the transition to a greener future in Europe could allow countries to eliminate Russian gas before supplies from other nations. Patrick DeRochie of the Shift Action for Pension Wealth and Planet Health, a climate advocacy group, said: to a large extent. regulated utilities’. Shift, which criticizes pensions for their carbon-based energy holdings, has brought the issue of European pension contributions to the attention of The Globe and Mail. “In the event of a war in Ukraine, these companies also retail the products of the Russian state-owned gas company, indirectly financing Putin’s aggression,” he said in an e-mail comment. “Pension funds seem to view investment in infrastructure as low-risk cash registers, but there are real implications for business models that help support authoritarian regimes and prevent the continued use of fossil fuels.” Net4Gas, for example, was placed on a negative rating clock – a warning that a debt downgrade could occur – by Fitch Ratings in early March, less than two weeks after the Russian invasion. The watch, Fitch said, reflected growing risks to the “willingness and ability of Russian gas company Gazprom to comply with its obligations under the” ships or payment “gas contracts with Net4Gas, which are more than 70 percent of the company revenue ”. In an email response, OMERS spokesman Neil Hrab said Net4Gas “is a wholly owned entity. Net4Gas is therefore legally obliged to make its pipeline capacity available to any customer wishing to ship its gas to the Czech Republic and may not reject any customer who meets the formal requirements laid down in national / European law and regulation. . » Mr Hrab said Net4Gas was “complying with all applicable international sanctions laws and continuing to monitor the situation closely”. OMERS and the other three pension funds made public comments about the sale of Russian shares in the first week of March, as international pressure mounted on major investors to leave the country. The four funds said Russia was not an “investment market” or had no “direct investment” in the country, suggesting that the Russian exposure was made through investments in stock indices. BCI CEO Gordon Fife called Russia’s actions “humiliating” and explained why it was moving away from politics to comment on its investment activities. They all said they would comply with Canadian sanctions or voiced support for global sanctions. BCI spokeswoman Gwen-Ann Chittenden said in an e-mail that the fund “is not involved in day-to-day affairs” nor its investments in Open Grid Europe and Czech Gas Networks Investments, so it could not answer questions about way the two companies will meet the Russian challenges. Open Grid Europe says the European Hydrogen Backbone Initiative – of which Next4Gas and Fluxys are part – has stepped up efforts to reduce Europe’s dependence on Russian energy by advancing its plans for a new hydrogen transport system by “2030, from 2035. After the Russian invasion of Ukraine, the burden falls on European countries to achieve greater energy independence.” In an e-mail, Teachers spokesman Dan Madge said that given its location in southern Italy, “the vast majority” of the gas transmitted through the Società Gasdotti Italia network comes from North Africa and Azerbaijan via Trans Adriatic Pipeline. “A small percentage enters their network through the TAG pipeline system and the gas in this system is likely to come from Russia.” The company, says Madge, “provides an essential role in the transportation of gas, but it does not supply or import it and therefore has limited influence over where it comes from.” Caisse spokesman Conrad Harrington said in an e-mail that Fluxys “has no financial interest in Russia and does not own the gas passing through its infrastructure. it only carries it and stores it “. The Zeebrugge terminal is, he says, “by law, an open access facility and no customer can be discriminated against. In the absence of European sanctions on Russian gas, Fluxys is obliged to honor its agreements with all customers. However, if sanctions are imposed, Fluxys will of course comply with them. “ Caisse, which held hundreds of millions of dollars worth of Russian stock, sold them in the days before Russia invaded Ukraine, in part through an investment strategy copying global indices. Your time is precious. Deliver the Top Business Headlines newsletter to your inbox in the morning or evening. Register today.
