The CEO of Alberta Investment Management Corp. (AIMCo) says divesting from fossil fuels is the opposite of what pension funds should be doing if they want to help solve the climate crisis.
Evan Siddall — head of what is one of Canada’s largest institutional investors, with $168.3 billion of assets under management as of the end of last year — said in an interview that AIMCo wants to be a leader in financing the transition to a low-carbon economy, but it won’t do that by divesting from fossil fuels as some global pension funds have done.
Instead, Siddall said AIMCo will be exploring opportunities to invest in oil and gas companies and other heavy industrial emitters.
“We don’t believe in [divestment] at all, as a strategy,” Siddall said.
“The energy sector is the sector that’s investing in this area [emissions reduction] the most, and that has the most to lose. So we think that deserves our support and that’s where we will invest. And we think that’s where the returns are, too.”
No denying importance of sector, says Siddall
Siddall made the comments Wednesday at a ribbon-cutting event in Calgary to mark the opening of AIMCo’s new office in that city. Up until now, AIMCo — which is responsible for the investments of pension, endowment and government funds in Alberta and is headquartered in Edmonton — has had secondary offices in Toronto, London, U.K., and Luxembourg.
Siddall — who has been AIMCo’s chief executive for just over a year, and was formerly CEO of the Canada Mortgage and Housing Corporation — is also considering opening offices in Asia and possibly New York as the corporation seeks to become more globally focused over the next couple of years.
But he said there is no denying the importance of the Canadian energy sector currently and moving forward as global efforts to decarbonize economies and hold the trajectory of climate change below the dangerous tipping point of 1.5 degrees Celsius of warming accelerate.
“We [AIMCo] have been absent from the Calgary oil and gas and energy hub, which has probably left us less informed than we could be,” Siddall said.
While environmental groups have argued that one of the best ways to make progress on climate change is to urge banks, pension funds and investors to cut funding to the fossil fuel industry, Siddall said that’s misguided.
He said if Canada is to meet its Paris Climate Agreement pledges it will need not only to invest in renewable, zero-emission energy, but also to help heavy emitters lower their greenhouse gas footprints, or go from “grey to green.”
“And that means investment in oil and gas companies. It actually means supporting them,” Siddall said.
AIMCo already has $3.2 billion invested in no carbon or low-carbon assets through its infrastructure and renewable resources portfolio. The corporation also completed its inaugural “green bond” issuance last year through its AIMCo Realty division.
But Siddall said in the year ahead, AIMCo will explore opportunities for its clients to profit from the transition to a low-carbon economy by providing capital to heavy emitters working on their own net-zero plans.
“The initial sectors we’re looking at are the energy sector, the power and utilities sector, industrial emitters in general,” he said.
“We see the potential for strong financial returns. We’re a long-term investor, so unlike public markets that tend to operate quarter to quarter with much shorter-term horizons, we can look to a transition into 2030 and see the path to earning a return on decarbonization.”
In recent months, the Canadian oil and gas sector has rolled out a flurry of announcements of proposed projects — from hydrogen plants to renewable diesel facilities to carbon capture and storage — aimed at lowering the industry’s emissions profile.
‘You’re funding the bad stuff’
The largest of these is the massive project proposed by oilsands consortium Pathways Alliance that aims to capture CO2 emissions from oilsands facilities and transport it to a storage facility near Cold Lake, Alta, delivering an estimated 10 million tonnes of emissions reductions per year.
On Tuesday, Lindsay Patrick, head of ESG and strategic initiatives for RBC Capital Markets, said in an interview in Calgary that there’s growing recognition within the financial sector that tools such as green bonds could be used not only to support the scale up of green technology but also to help clean up more conventional industries.
“The new idea is to support companies that aren’t 100 per cent green but that have specific projects that are aligned with a 1.5 degree scenario,” Patrick said.
However, Greenpeace senior energy strategist Keith Stewart said Tuesday that financing companies because of specific climate-friendly projects they may have doesn’t make up for the fact that the Canadian oil and gas sector is still planning to increase the overall volume of fossil fuels they produce in the long-term.
“When you’re providing this kind of blanket finance to these companies, you’re funding the bad stuff along with the better stuff,” Stewart said.
Phoenix Copper Ltd upped investment in its Empire Mine with drilling ongoing – Proactive Investors USA
Phoenix Copper Ltd (AIM:PXC, OTCQX:PXCLF) increased its investment in its Empire Mine as drilling continues at the site despite the gloomy wider economy.
“The outlook has deteriorated, at least in the short-term,” said chairman Marcus Edward-Jones. “Copper and sterling have both been extremely volatile, and currently sit at around 30% below their highs for the year,”
Investment in Empire increased to US$29.7mln in the six months to June, from US$18.6mln from the same period last year.
And the USA-focused exploration company added core drilling is ongoing at the copper mine.
Mineralisation was encountered at both its Red Star silver-lead deposit and its Navarre Creek gold project, with further exploratory drilling commencing at Red Star.
Net assets increased to US$38.2mln in the period from US$37.7mln, according to a statement.
However, Phoenix reported a loss of US$1mln “after charging an unrealised foreign exchange loss on sterling-denominated assets.”
Cash balance stood at US$9mln, while loans to operating subsidiaries increased to US$25.5mln from US$16.1mln, it said.
Edmontonians lost $5.6 million to cryptocurrency investment scams: Police – Edmonton Journal
Edmonton police say local investors have lost more than $5.6 million to cryptocurrency scams between fall of 2019 and the end of last year.
EPS says it investigated 112 cryptocurrency fraud reports over that time. Complaints lost $50,000 on average or less to the scam, but the highest loss exceeded $1 million, police say.
“Sadly, we encountered several complainants who lost their life savings to this scam,” says Det. Dana Gehring with the EPS Cyber Crime Investigations Unit.
“Unfortunately, once funds are invested or sent to another party using cryptocurrency, there is little we can do to retrieve them. While we always aim to apprehend those responsible, our best tool with this type of fraud is to educate on prevention.”
More than 90 per cent of the incidents referenced bitcoin, according to EPS.
More recent numbers for 2022 are not yet available.
Police say in most incidents, investors were convinced to invest in cryptocurrency via what often appeared to be legitimate websites or apps but that are actually controlled by scammers.
Scammers befriend complainants via social media, phone calls, online advertisements and online dating platforms before encouraging them to make a small investment, police say.
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Police warn that at that point, scammers would often manipulate the data on their website or app to give the appearance of growth and encouraging victims to give them more money.
Eventually, the websites or apps disappear, leaving those victims without any means of recovering their money.
EPS says it recommends anyone considering investing in cryptocurrency to confirm the website or app is legitimate, be wary of anyone unknown approaching with investment opportunities, and to verify the investor or investment company registered with FINTRAC or the Canadian Securities Administrator.
Divorce should prompt investment strategy review, say financial planners – Advisor's Edge
“People don’t always realize the true impact of a divorce on their financial circumstances until much further down the line,” said Crowe, who is also a certified divorce financial analyst (CDFA). “The earlier you begin these conversations with your advisor, the earlier you can begin to understand what these changes look like, and can make any adjustments that may be required.”
Timely notice of an impending divorce is particularly important during periods of market volatility. “If we’re advised early, we can add liquidity to a portfolio and make it more conservative, so that you’re not in a situation a year later where you’re forced to sell at the wrong time in the market cycle,” Crowe explained.
Even in the midst of an economic boom, it’s hard to avoid taking a financial hit in the immediate aftermath of a divorce, said Eva Sachs, a Toronto-based fee-only divorce financial consultant who also holds a CDFA designation.
“You’re taking one household with a certain amount of income, and now you’re trying to run two households with the same money, which is really challenging,” she said.
One or both parties usually need to free up funds for real estate, either to buy their former partner out of the matrimonial home, or to purchase somewhere new to live, Sachs added.
But recent fluctuations in capital markets, combined with the downturn in the housing market, have added a fresh wrinkle to the complex process that determines the size of the equalization payment owing from the spouse whose assets grew more during the span of the marriage.
According to divorce laws, valuations for property division are tied to the date of separation, rather than the date a divorce is granted or a settlement reached. Those latter dates can often be months or years later, depending on how hotly the parties contest the matter.
“If the separation date was six months ago, that sets a certain value on the matrimonial home, but the reality today is probably quite different,” Sachs said.
The same goes for RRSPs or — taking an extreme example — investments in cryptocurrencies such as Bitcoin or Ether, which have lost two-thirds of their value in the past year.
Former partners can agree to delay a sale or stay invested together until markets recover or stabilize. But “generally, that’s on a short-term basis,” Crowe said. “Even if the relationship is cordial today, it could change a week or a month from now.”
Sachs works with clients to create financial projections and forecasts based on their updated income, asset and liability levels. Longer-term, the outlook often varies depending on their age.
“If you’ve transferred a large amount out of an RRSP or a defined-benefit pension, then you have to think about how you catch up in terms of those payments. If you’re older, it’s hard because you’ve got less time to make up the difference.”
For those who deferred to a former spouse on money matters, it’s often the first time they have taken an active role in their finances, Crowe said.
“Overall, you will want to evaluate the suitability, risk, liquidity and asset allocation of the portfolio to ensure it is still aligned with your evolving goals and objectives,” she said. “Just having the conversation can be a really beneficial process for someone who is scared about their financial security after divorce. Getting into a position where you can make educated decisions about your financial future is a great confidence boost.”
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