Report says industry will protect itself despite climate issues
The Canadian fossil-fuels sector won’t give in to environmental challenges because the stakes are too high.
According to a new report, the industry is controlled by only a few investors who will fight to maintain business as usual rather than addressing its serious climate issues.
“Substantial ownership and strategic control of Canada’s fossil fuel industry are in the hands of a few major players, including all the Canadian big banks and several US investment funds, governments and some wealthy families—many of which are located outside Canada,” says Bill Carroll, co-author of the study. “These entities have both an interest in the sector’s continued growth and the economic power to shape its future.”
The study – ‘Who Owns Canada’s Fossil-Fuel Sector? Mapping the network of ownership and control’ was released Thursday by the Canadian Centre for Policy Alternatives and the Parkland Institute.
The authors found that 40% of the industry was owned by just 25 top owners in the years studied (2010-2015) with Exxon Mobil and RBC the top investors.
Who are the big investors?
Among the pool of leading investors, majority ownership of Canadian-based fossil fuel companies by foreign corporations accounted for the largest share (16%) of the sector’s revenues between 2010 and 2015.
This was followed by asset managers and investment funds such as BlackRock and Capital Group followed closely with approximately 15% of revenues; banks and life insurers (approx. 12%) with the big five Canadian banks (RBC, TD, Scotiabank, BMO and CIBC) consistently ranking among the top investors; wealthy families (8.5%) including Husky Energy majority owner Li Ka-Shing; foreign governments (3%); and Canadian governments (2%).
“Financial institutions, pension funds and asset managers together own substantial blocs of shares in many of these companies,” says Carroll. “Each institutional investor may own less than 10% of any single company, but as a group they own far more. This places them in a position to exert control as a “constellation of interests”.
He added that in the past, foreign ownership of Canadian energy assets was considered a threat to self-determination and democracy, “but the trend towards more Canadian corporate control of fossil-fuel extraction appears to have made little difference in how the industry functions.”
Substantial ownership & control over Canada’s fossil fuel sector are in the hands of a few major players (including all the Canadian big banks). Our latest study looks at the major investors and the constellations of interests they advance. https://t.co/1wp2OkGWfx pic.twitter.com/OALyzxxzMx— The CCPA–BC (@CCPA_BC) October 18, 2018