Environmental group sends legal warning to pensions over potential LNG investments

Summary

• Environmental group Stand.earth engaged Montreal-based law firm Trudel Johnston & Lespérance to warn six major Canadian pension funds about climate-related legal risks associated with liquefied natural gas (LNG) megaprojects.
• The warning letter was addressed 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.
• The law firm, known for a $32.5-billion tobacco settlement & ongoing opioid litigation, stated that ignoring fossil fuel risks could lead to legal consequences for plan administrators.
• Stand.earth urged the funds to refrain from investing in LNG Canada, Ksi Lisims LNG, or similar projects unless they can demonstrate compliance with fiduciary obligations through rigorous assessment.
• The letter was timed to coincide with reports that four pension funds plan to join a Blackstone-led group acquiring a stake in the Mitsubishi Corp. subsidiary holding interests in LNG Canada.
• LNG Canada recently approved a Phase 2 expansion to double output in Kitimat, B.C., & has been designated a national-interest project under federal legislation.
• Richard Brooks of Stand.earth noted the funds collectively manage $1.6 trillion & chose legal language to emphasize accountability after direct communication attempts failed.
• Geoff Souter of CPP Investments described the LNG Canada project as a high-quality asset with strong long-term fundamentals, while PSP confirmed receipt of the letter but rejected Stand.earth's risk assessment.
• Separately, a lawsuit filed by four young Canadians alleging CPPIB fails to protect long-term contributor interests is currently before the Ontario Superior Court.
• Stand.earth indicated that legal action remains a tool of last resort if pension funds proceed with LNG investments after receiving these warnings.