British Columbia Teachers for Peace and Global Education
A Provincial Specialist Association of the BC Teachers' Federation


Ten Myths about Ethical Investing and B.C. Teachers' Pension Fund

Myth #1: The fund through which B.C. teachers invest their pension contributions is already‘ethical’ and does not finance weapons manufacturers, for example.

Ethics are, of course, somewhat subjective.  However, it is clearly false that the British Columbia Investment Management Corporation (BCIMC) is not involved in unsavory investments such as weapons. A perfunctory look at the BCIMC investment portfolio reveals a large number of weapons-related investments, including General Dynamics, Northrop Grumman, Raytheon, DRS Technologies and BAE.  If you agree that teachers should not be financing companies that supply arms for illegal, aggressive wars – wars that kill and maim civilians, and destroy infrastructure – then surely we must divest of stocks in such companies.  For a complete list of BCIMC investments, go to:

Myth #2: If we were to divest of stocks in arms, we would end up divesting of everything in BCIMC’s portfolio.

It is true that some companies operate in both the civilian and military spheres.  However, many companies are concerned almost exclusively with the latter.  BAE, for example, derives 100% of its revenue from weapons manufacturing. BAE, General Dynamics, Northrop Grumman, Raytheon, and DRS are such companies.

Myth #3: As we do not have direct control over BCIMC, we are powerless to do anything about its investments.

It is true that we do not have direct control over BCIMC investments.  However, we can – along with other public sector employees, in cooperation with the Ministry of Finance – direct BCIMC in its investment practices. First we must direct our own Teachers’ Pension Board of Trustees to take an ethical stand.  Changes to the BCIMC investment portfolio cannot be made overnight – but we must start somewhere.  It is up to teachers to take a leadership role.

Myth #4: If we did not invest in weapons manufacturing and other ‘unethical’ endeavours, our pension would run out of money.

Anything on the stock market can gain or lose value – regardless of whether it is ‘ethical’ or ‘unethical’.  That’s how the stock market works.  There is evidence, however, that ‘ethical’ investments may in fact be more stable.  Peter Chapman, Executive Director of the Vancouver-based Shareholder Association for Research and Education ( has stated that divestment of ‘unethical’ stocks can actually be in the best financial interest – that is, serve the fiduciary responsibility – of an investor such as BCIMC.  As an example of this, the Norwegian Government Pension Fund– which has divested of (that is, excluded) stocks in companies that manufacture arms, pollute excessively, and violate labour standards – has made consistent gains.

Myth #5: A pension fund like Norway’s might be good for that country, but would not work in Canada.

The Norwegian Fund and BCIMC both invest internationally.  Their investments are not national or local in character.

Myth #6: Because the Norwegian Government Pension Fund invests Norway’s petroleum revenue, and BCIMC invests contributions from employee wages, there can be no comparison.

This is a non-sequitur.  Where money is invested, and where if comes from, are two distinct issues.  The question is whether or not we should, as BCTF teachers, be sending our pension contributions to be invested in activities that are so clearly contrary to our mandate as a “social justice union”.

Myth #7: The Norwegian Government Pension Fund has in fact made very few divestments of ‘unethical’ stocks.

Whether divestments are ‘few’ or ‘many’ is subjective.  The fact is that Norway has made divestments based on its ethical principles. According to Susan Enefer, BCIMC’s manager of shareholder engagements, BCIMC has never made a divestment for ethical reasons.  Moreover, BCIMC holds stocks in many companies that, for very good reasons, the Norwegian Fund has excluded.  For a list of companies excluded from the Norwegian Fund – and explanations – see:

Myth #8: Shareholder engagement – rather than divestment – would be a more effective method to ensure that our values are reflected in our pension investments.

Shareholder engagement (that is, putting internal pressure on companies in which we invest) may be effective in the case of companies that derive a minor part of their revenue from activities we deem unethical.  Shareholder engagement may in fact be positive, and its effectiveness should be evaluated on a case-by-case basis.  However, if corporations prove intransigent – or derive the majority of their revenue from unethical activities in the first place – divestment is clearly in order.  It would be nothing short of absurd to expect shareholder engagement to influence the activities of a corporation whose entire raison d’ĂȘtre is in opposition to our values as teachers. For example, it would make no sense to ask BAE, which derives 100% of its sales revenue from weapons, to stop manufacturing weapons.  If we believe it is wrong to promote industries of war, then the only answer is to divest.

Myth #9: Our tobacco holdings are making money right now.  Therefore, it would not be responsible to divest of our tobacco holdings.  

That dependson how you define ‘responsible’.  Acting responsibly means ‘doing the right thing’.  Tobacco is addictive and a killer.  Is this something we really want to finance?  In any case, it is questionable that tobacco can continue to bring high returns. For example, the federal government has fined two Canadian tobacco companies, Imperial Tobacco Canada and Rothmans, one billion dollars for their role in smuggling cigarettes.  Moreover, as lawsuits are filed against tobacco companies, they will no longer be as profitable as they once were.  And with an overall decline in the number of users, markets will dwindle.  Funds divested from tobacco can be reinvested profitably in more responsible enterprises.

Myth #10: The notion of ethical investing is very radical and at this time of financial uncertainty what we need is a time-tested, conservative approach to investing our money to make sure that our pension stays healthy.

Ethical investing stands up well when compared to traditional ways of investing in the stock market. In an article from the Journal of Business Ethics, dated November 2006, the author concludes, “Our Canadian evidence supports the conjecture that any performance differential between ethical mutual funds and their conventional peers is statically insignificant” ( The Guardian reports that Triodos, a European social bank, was unaffected by the 2008 market crash, and recently the ethical Parnassus Fund reported a five-year return of 21.5 percent (