Imperial Oil director under scrutiny for pension fund board position

Province's environmental crisis triggers demands to oust executive

Imperial Oil director under scrutiny for pension fund board position

As Alberta grapples with one of its most significant environmental controversies, a prominent figure from Imperial Oil finds herself entangled in a growing controversy.

Miranda Hubbs, a key representative of Imperial Oil and a board member of Canada's Public Sector Pension Investment Board (PSPIB), is facing mounting pressure for her removal from the pension fund's leadership. Overseeing $240 billion in assets for around 900,000 active and retired federal employees, the PSPIB plays a crucial role in managing public sector pensions.

In a letter addressed to Prime Minister Justin Trudeau and the new cabinet, a group of pension plan members appealed for the dismissal of Hubbs from her position on the PSPIB board. Their demand stems from her role in Imperial Oil's failure to promptly communicate a major tailings leak to affected communities and authorities, during one of Alberta's most notorious environmental mishaps.

Hubbs not only serves as an Imperial Oil director but also chairs the company's community collaboration and engagement committee. During the time of the tailings leak from the Kearl oilsands site in May 2022, she held this oversight role. The leak, which involved 5.3 million liters of tailings, drew concerns after the Alberta Energy Regulator's delayed notification to impacted regions and governments, violating agreements mandating immediate communication of such incidents.

An investigation into potential violations of federal laws by Imperial Oil has been initiated by Environment and Climate Change Canada.

Board member's overlapping roles raise ethical concerns

The letter sent on Tuesday underscores Hubbs' role in overseeing Imperial Oil amidst ethical climate risks and environmental concerns. Imperial Oil countered these allegations, asserting that Hubbs acted ethically and responsibly.

“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 read, as quoted in Canada’s National Observer.

“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.”

“Throughout her career, Ms. Hubbs has demonstrated exemplary character,” said Christine Randall, Imperial Oil spokesperson. “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.”

Responding to the mounting concerns, the Treasury Board of Canada clarified that directors are selected from a pool of candidates presented by a nominating committee. Treasury Board President Anita Anand expressed her intention to thoroughly review the raised concerns.

Juggling obligations

The issue also resonated with Cory Proulx, a member of the Canadian Armed Forces, who questioned the appropriateness of an Imperial Oil director holding a role on the board of his pension fund. Proulx stressed the importance of ethical leadership in tackling climate change-related risks.

“What on Earth is a director of Imperial Oil doing on the board of directors of my pension fund?” he told Canada’s National Observer.

Hubbs had previously faced criticism within the financial sector. Her re-election to the Imperial Oil board faced opposition from entities such as the British Columbia Investment Management Corporation and the Investment Management Corporation of Ontario. These institutions cited “a lack of oversight that led to major controversies” and misalignment with investor expectations regarding climate risks.

Hubbs' dual roles, as a director of both Imperial Oil and the PSPIB, entail legal obligations to act in the best long-term interests of both entities.

“The best interests of Imperial Oil are incompatible with a PSPIB Directors’ fiduciary duty to invest in our best long-term interests,” the letter read. “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.”

As climate change increasingly influences financial considerations, such dual responsibilities raise questions about potential conflicts of interest. Experts highlight the need for directors to navigate these complexities with diligence.

Tony Ferguson, a program officer at Natural Resources Canada and a member of the public service pension plan, joined Indigenous communities in expressing concern over the detrimental effects of Imperial Oil's tailings pollution. His support resonates with the call for greater accountability and ethical responsibility in crucial board positions.

“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,” Ferguson told Canada’s National Observer.