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NUPGE to partner with Ethical Funds to encourage corporations operating in the Alberta oil sands to assess and disclose social, environmental, and financial risks of their oil sands exploitation.
Ottawa (17 February 2009) – The 340,000-member National Union of Public and General Employees (NUPGE) has entered into a partnership with The Ethical Funds Company, a division of Northwest and Ethical Investments L.P., Canada’s leading manager of socially responsible mutual funds, aimed at encouraging corporations currently operating or planning to operate in the Alberta oil sands to adopt more environmentally and socially sustainable policies.
NUPGE and Ethical Funds are planning to engage several of those large corporations in a ‘corporate dialogue’ as a means to encourage them to assess and disclose the social, environmental, and financial risks of oil sands exploitation.
Alberta’s oil sands, considered by many to be an “environmental catastrophe in the making,” contain 173 billion barrels of established reserves, the second largest oil reserve in the world next to Saudi Arabia. The oil sands have been under development for decades, but shrinking conventional reserves and voracious demand have fuelled a modern-day development rush to rival the gold rushes of the past, slowed only temporarily by our current economic downturn and falling oil prices.
The amount of proposed development and lack of strategic planning or cumulative impact assessment is creating negative environmental and social impacts that bring risks to energy companies and their investors. Extracting and refining oil sands-derived oil produces nearly triple the greenhouse gas emissions (GHGs) of conventional oil production and oil sand mining requires 2-5 barrels of fresh water for every barrel extracted. The reliance on the Athabasca River as a source of fresh water for mining operations, along with the fragmentation of natural habitats by –situ oil sands production, is of concern for birds and mammals of Canada’s Boreal forest.
Both Ethical Funds, through the various mutual funds it manages, and NUPGE, through the various jointly trusteed pension plans of its members across the country, have investments in many of the publicly-traded corporations which are currently operating in the Alberta oil sands. This gives both organizations the opportunity to establish a progressive dialogue with these companies aimed at improving company policy and performance in environmental, social, and governance (ESG) areas.
“Recent market volatility has slowed the pace of development,” says Robert Walker, Vice President, Sustainability with Ethical Funds. “This presents an opportunity for companies to implement oil sands development practices that address environmental and social risks.”
In a recent report, Ethical Funds has identified four categories of risk associated with the current pace of oil sands development: litigation risk related to First Nations; asset retirement obligations; regulatory risk related to the environmental and social costs of the oil sands; and the risks associated with the social license to operate.
"Some of our members’ pension money is invested in these companies”, says NUPGE Secretary-Treasurer Larry Brown. “We are concerned that their policies and practices are not environmentally sustainable and therefore could pose a substantial risk to our pension investments. Our union is looking forward to working with Ethical Funds to apply pressure to those companies to mitigate the environmental and investment risks as well as the social costs of the oil sands development.”
“We recognize that these companies have invested billions of dollars in oil sands, so they’re not about to pack up and go away. When the current economic crisis eases and oil prices rise, there will be a huge investment required. But NUPGE believes it’s in the best interests of our members’ pension plans to have a much better sense of how companies are anticipating and mitigating their environmental and social impacts.”
NUPGE and Ethical Funds will focus their dialogue with oil sands companies on what they are doing to evaluate and implement technologies that: reduce energy use; deal with greenhouse gases; support conservation and land use planning; and reduce air pollution. They also want to ensure that all affected First Nations consent to and benefit from development that is occurring in their communities and traditional territories. Stewardship of the Athabasca River and groundwater will also be a priority.
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE
More information:
The Ethical Funds Company’s Sustainability Perspective: Unconventional Risks: An Investor response to Canada’s Oil Sands