In the wake of one of Alberta’s largest environmental scandals, a high-ranking Imperial Oil representative who also sits on the board of Canada’s public sector pension plan is in the hot seat as calls mount to have her removed from the board.
The Public Sector Pension Investment Board (PSPIB) manages over $240 billion worth of assets on behalf of 900,000 active and retired federal servants. On Tuesday, a group of pension plan members wrote to Prime Minister Justin Trudeau and the newly minted cabinet calling for Imperial Oil director Miranda Hubbs to be removed from the PSPIB board of directors following her role in Imperial’s failure to communicate a massive tailings leak to affected communities and governments.
Hubbs serves as the chair of Imperial’s community collaboration and engagement committee, placing her in a vital oversight role at precisely the same time the company failed to notify downstream communities, the federal government and the Northwest Territories after 5.3 million litres of tailings leaked from its Kearl oilsands site. That leak began in May 2022. Even though the Alberta Energy Regulator was made aware, it took until February to notify affected governments and communities, despite agreements requiring immediate communication of these issues. Since then, Environment and Climate Change Canada has opened an investigation into whether Imperial broke federal laws during this disaster.
“Hubbs has been responsible for the oversight of Imperial Oil when it has failed to ethically address climate risks, environmental degradation and impacts on Indigenous communities,” the letter sent Tuesday reads.
“Hubbs cannot remain a Director of PSPIB while she serves as the Director of a company that works to undermine Canada’s climate commitments and casually pollutes our country’s lands and waters while violating Indigenous rights,” it adds, pointing to the PSPIB’s code of conduct, which requires directors to uphold “the highest standards of corporate governance and ethical conduct.”
Imperial Oil told Canada’s National Observer it takes “strong exception to the allegation that Ms. Hubbs has acted unethically.”
“Throughout her career, Ms. Hubbs has demonstrated exemplary character,” spokesperson Christine Randall said. “Her integrity and commitment to sustainability contribute tremendous value to Imperial and its board, which continues to provide risk oversight and strategic direction regarding all aspects of the company’s business.”
A spokesperson for the Treasury Board of Canada said directors are chosen from a list of candidates put forward by a nominating committee, and that Treasury Board President Anita Anand had received the letter and "will give careful consideration to the concerns raised."
In a statement, Canadian Armed Forces member Cory Proulx said if a director for Imperial Oil couldn’t fulfil their duties to act ethically and oversee climate change-related risks, he has “little reason” to believe they could do so as a director for the PSPIB.
“What on Earth is a director of Imperial Oil doing on the board of directors of my pension fund?” he said.
Tuesday’s letter is not the first time Hubbs has faced criticism in the financial world for her role in the tailings leak. At Imperial Oil’s annual general meeting in May, the British Columbia Investment Management Corporation voted against Hubbs’ re-election over “a lack of oversight that led to major controversies.” Similarly, the Investment Management Corporation of Ontario voted against her re-election, citing her oversight of climate risk at Imperial Oil being “not aligned with investor expectations" of the company's pledge to cut greenhouse gas emissions to net zero by 2050 — a goal with no set meaning, but generally refers to offsetting any emissions a company is responsible for.
Because Hubbs is a director at Imperial Oil, she has a legal duty to act in the company’s best long-term interests. And because she is also a director with the PSPIB, she has an equal obligation to act in the pension fund’s best long-term interests.
“The best interests of Imperial Oil are incompatible with a PSPIB Directors’ fiduciary duty to invest in our best long-term interests,” the letter says. “It’s impossible for us to ascertain if Ms. Hubbs will oversee PSPIB decisions on human rights, climate risk and fossil fuel investments in the interest of federal employees and retirees — or Imperial Oil’s short-term interests to profit off of oil and gas.”
Because climate change threatens financial investments, the legal duty compelling directors to act in the company’s best long-term interests may ultimately force financial institutions like pension plans to phase out their fossil fuel investments. As Carol Liao, associate professor at the University of British Columbia’s Allard School of Law, previously told Canada’s National Observer, directors who sit on the boards of both a fossil fuel company and a financial institution have to be very aware of potential conflicts of interest to act in both companies’ best long-term interests.
“You can’t just put on different hats when you want,” she said.
Natural Resources Canada program officer, and member of the public service pension plan, Tony Ferguson said in a statement that by signing the letter sent Tuesday, he stands with Indigenous communities dealing with the direct harm of Imperial Oil’s tailings pollution.
“Someone who serves as the director of a company that violates Indigenous rights, works to undermine Canada’s climate commitments and casually pollutes our country’s lands and waters should not be on the board of my pension fund,” he said.
This story previously referred to UBC associate professor Carol Liao as the director of the Centre for Business Law, a position she held until July 1.
Comments
Is there anyplace on earth that the oil and gas industry doesn't have their tentacles reaching?
What was the selection committee thinking in the first place?
Please keep reporting on the many pension fund boondoggles and exposing the slow walking (as well as any success stories I hope) of pensions divesting all oil and gas holdings. What is the hold up with doing so?
A lack of courage comes to mind. Decades of pretending that oil and gas 'fuels the economy' and so must be given an automatic pass on all matters environmental? Perhaps the deluded belief that Fossil Fuel production guarantees great returns and so is essential in any large portfolio?
The fact is, all our pension funds, accumulated over years in the labour force.......have been a boon to the continued extraction of the substances that fuel global heating. Heck! We can't even use language specifically when it comes to fossil fuels....it was oil and gas changed the language from global warming to the more nebulous 'climate change'. Can't wait to see what they'll do to the term 'global boiling' proposed by our United Nation's Secretary General...because for sure, plain talk is not appreciated in the patch.
Unfortunately, most of us have been so careful not to offend the goose that lays the 'black bombshell' that we know nothing about the role of euphemism in perpetuating Fossil Fuel power. It may be too late to talk plain English now, divest our money from what is killing the planet, and redirect it to green initiatives that give us some chance of a future.
Investing in Fossil Fuels has seemed like such a 'no brainer' that we might not have the IQ to admit how wrong we were, and chart a new path. In spite of the fact more money is going into green technologies currently than is going into oil. In spite of the fact green technologies are creating jobs while Big Oil sheds them in favour of automation. The intelligence we failed to use isn't even required on the job for much longer......complex algorithms intend to replace it with IA.
As to our pensions.. we'll be told to be grateful they still exist....and not be too finicky about where the money is coming from.
I'm a public service retiree--so one of my pensions comes from this envelope.
I am COMPLETELY and violently opposed to any attachment to any fossil fuel company being involved, especially in a decision-making role.
If the conflict of interest is not obvious to the board, they need to be schooled--fast.
Get her out. Now
There is nothing 'casual' about pollution from tailings ponds. They are a 'calculated risk', which reads as 'better than putting the waste water directly into the river while we work and hope for a better technical solution to removing the contaminants'. Meanwhile, we all benefit from the business, either indirectly through federal and provincial oil royalties and sales taxes, or directly through employment or through dividends in our pensions.
As for director's responsibility - the problem lies with the law, which binds them to look out for the best interests of investors (share holders, pension members, etc.) with no mention of 'the community commons', i.e the rest of us and the ecology we depend on.
Kicking out a director sounds like a "be careful what you wish for" strategy - changing the fiduciary responsibilities of Directors to encompass more than 'return on investment', adding for example societal, health, and environmental returns/benefits, is the better political goal.