Canada Pension Plan Investment Board, Toronto, made a C$250 million (US$236.4 million) investment in privately held Alberta tar sands developer Laricina Energy.
The purchase gives the C$127.6 billion CPPIB a 17% stake in the Calgary-based company and the right to nominate a board director at the company.
“Laricina has an experienced and proven management team and has strong growth potential from its world-class resource base,” said Andre Bourbonnais, CPPIB's senior vice president of private investments. “We are pleased to be making an investment that we believe will deliver attractive returns over the long term.”
The purchase follows CPPIB's decision not to back shareholder resolutions seeking environmental reports on the controversial tar sands projects at BP and Shell earlier this year. It will come as a snub to campaigners who have urged large Canadian public pension plans to be more visible in addressing the whole tar sands issue.
CPPIB is a member of the U.N. Principles for Responsible Investment and adopted its policy on responsible investing in 2005, and considers ESG factors from a risk/return point of view. It encourages companies to adopt policies and practices that enhance long-term financial performance.
CPPIB spokeswoman Linda Sims was quoted as saying the fund believes Laricina is “proactive” in managing environmental issues.
Daniel Brooksbank is editor of Responsible Investor.