Road to success for Canadian Pension Plan paved with complexity

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Sources of success: diversity across sectors

Above: screen shot of CPP CEO David Denison's presentation illustrating percentages of CPP allocations

As Canada moves towards becoming a world energy superpower, CPP is heavily invested in the energy sector with around half a billion invested in Royal Dutch Shell and another half a billion in Exxon Mobile Corporation.  And the CPP owns $54 million with of Halliburton Company. Also in the fund is a relatively small amount of shares in Kinder Morgan Inc/Delaware, valued at $2 million.  Mining companies are also largely represented.

In the domestic equity portfolio (released last March), CPP owns $125 million in shares of Brookfield Asset Management, the company responsible for imminently logging one of British Columbia's most beautiful forests, located on Cortes Island. 

The oil sands companies held in the domestic porfolio are too numerous to list.  Ditto for mining companies.

However, there are also holdings in Canadian Solar Inc. One million dollars worth. And there is $2 million invested in the chlorine manufacturing facility located in North Vancouver under the Second Narrows Bridge, the Canexus Corp. Large investments are also in banks, railways, coal, gold and natural gas.

CPP owns $201 million worth of shares in Enbridge and $9 million in the Enbridge Income Fund Holdings Inc.   

The fund holds $182 in Cenovus, an oil sands company and $62 million of Nexen.

The CPP owns $366 million of shares in Suncor.

Moving beyond energy, CPP holds $814 million in Apple, $367 milion in Microsoft,  $204 million in Google, $334 million in Philip Morris International, Inc. and a sweet $6 million in the Tootsie Roll Industries. 

A variety of groups support ethical investing and belive shareholders should use their power to shift companies they own pieces of to become more environmentally and socially conscious.

Back in 2006, the Green Party's then leader Jim Harris promised to make the CPP's investments shift closer to what he described as reflective of Canadian values.

"Do Canadians really want their pension funds invested in Halliburton, Lockheed Martin, NIKE or Wal-Mart?" asked Harris. "The Green Party thinks not, and it's not because these investments are significant in the overall assets that the Canada Pension Plan manages, but because it sends a powerful message around the world about who Canadians are, what we believe in, and what we're ready to stand-up for."  Harris said:

According to the CPP, "While social investing is easily applied by individuals and small groups of like-minded people, it is extremely difficult, if not impossible, to implement for an institutional investor…Consequently, we do not select or exclude investments through the application of positive or negative screens based upon religious, social, economic, political, or personal criteria, or any other non-investment criteria."

A search of the web today turned up no recent demands that CPP focus on ethical investment. 

The CPP did not respond to requests for comment on this article.


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