“Our pension funds are amongst the world’s largest and most sophisticated investors,” Carney told the World Economic Forum in Switzerland. The funds are one of Canada’s prized assets, along with the country’s educated workforce and its sizable reserves of energy and critical minerals. “We have capital, talent and a government with the immense fiscal capacity to act decisively.”

But some key questions were left unasked: If Canada’s pension funds are so powerful, why aren’t they investing more in their home country? Is it possible for these behemoths of global finance to commit more of their multitrillion-dollar assets to the Canadian economy in this time of need?

In the past, most of Canada’s major pension funds have pushed back against even a whiff of political interference. Yet recently, some pension CEOs are saying they are open to investing more in Canada, especially in strategic sectors of national interest. Deals like the recent Caisse de dépôt et placement du Québec (CDP) investment in renewable-energy company Boralex show that some of the funds are already moving in this direction.

Are these sleeping giants getting ready to pony up the capital needed to kick-start Canada’s critical industries? Here are the central issues in this debate.

The Maple 8’s global reach

Canada’s major pension funds rank among the top in the world. The eight largest, known as the Maple 8, manage more than $2.5 trillion in assets. The largest of these, the Canada Pension Plan Investment Board (CPPIB), is the seventh-largest pension fund in the world. At the end of 2025, CPPIB held $781 billion in assets for the CPP, which serves 22 million Canadian workers and retirees.

CDP, which manages funds for the Québec Pension Plan and other public funds and investors in Quebec, is number two in Canada at $517 billion. The Ontario contingent includes three large public-sector funds: the Ontario Teachers’ Pension Plan (OTPP), the Healthcare of Ontario Pension Plan (HOOPP) and the Ontario Municipal Employees Retirement System (OMERS). The Maple 8 also includes British Columbia Investment Management Corp. (BCI) and Alberta Investment Management Corp. (AIMCo), investing funds in B.C. and Alberta, and Public Sector Pension Investments (PSP), managing federal public-service pension funds.

The funds have developed a management style known as the Canadian model, marked by independence from the governments that established them, internal professional management (rather than outside managers) and global investment in stocks and bonds and alternative assets such as real estate. The formula has mostly been successful. The annual average return of Canadian pensions has outperformed all but a few countries since the financial crash of 2008, although gains have slipped in the last two years as a result of declining real estate and private equity assets.

Pensions already invest in Canadian stock markets. Could they invest more?

The global profile of these funds has sparked calls to invest more in Canada. A CBC investigation in February showed that most of the Maple 8 invest far more in the United States than in Canada. CPPIB, for example, has $366 billion invested in the United States (47% of its total) and only $98 billion in Canada (13%). OMERS’s portfolio is 55% American, and PSP is 41% invested in the United States.

The level of U.S. investment seems shocking, bordering on unpatriotic, considering the recent economic pain inflicted by the United States. Only three of the Maple 8 funds have more assets invested in Canada than in the United States – HOOPP, OTPP and AIMCo.

We have the capital available right now to make those investments. We’re just waiting for those opportunities to manifest themselves.

– Michael Wissell, CIO, HOOPP

But compared with Canada’s share of global markets, the pensions are actually over-invested in their home country. According to the MSCI World Index (a broad-based investment index holding companies across the globe), the United States represents 70% of total world investment markets. Canada’s share is tiny at only 3.6%.

The funds argue that their mandate is to invest across the world in markets, sectors and companies that will deliver the best returns at acceptable risk to ensure that they can meet their long-term pension payouts.

Paul Calluzzo, a professor at the Smith School of Business at Queen’s University and a researcher for the Institute for Sustainable Finance, points out that pension funds have a legal and ethical obligation to invest in the best interests of their beneficiaries. “If a pension fund was to invest more in Canada, or support strategic industries, or just invest in infrastructure that was strategically important, that would be a cross-subsidy where the pension holders are footing the bill for something that benefits everyone,” he says.

The pension funds contend that it’s prudent to over-invest somewhat in Canada because of their “home-field advantage” through their detailed knowledge of local companies and cultures. But governments should resist the urge to think of pension funds as a national piggy bank, Calluzzo says. “There’s a temptation to say, ‘We have these huge pools of capital; let’s do something with them that helps Canada,’” he says, adding that it’s important to be mindful that pensions don’t belong to governments. “Those huge pools of capital are from the people who have been paying into their pension all those years. That’s something that should be respected.”

Pension CEOs open the door, but just a crack

Nevertheless, over the last few months, several pension fund CEOs have said they are open to investing more in Canada.

“As a nation, we have a significant opportunity to build a stronger and more resilient future, and OMERS wants to be part of that,” CEO Blake Hutcheson said in February. “We like the advantage that our relationships and on-the-ground expertise offer.” OMERS is looking for deals that support the fund’s financial objectives and Canada’s growth, he said.

“We have the capital available right now to make those investments,” Michael Wissell, chief investment officer at HOOPP, told Reuters on March 10. “We’re just waiting for those opportunities to manifest themselves.”

Last June, PSP CEO Deborah Orida said her fund is actively looking for additional Canadian investments. After years searching for global alternative investments, she told Bloomberg, “at PSP we’re asking ourselves: Have we been underleveraging our home-ice advantage.”

And in a speech last September, John Graham, CEO of CPPIB, cheered what appears to be a new spirit of cooperation by federal and provincial policymakers. “Unity and coordination will initiate the nation-building projects Canada requires. And those are exactly the projects that international and domestic investors, including us, are eager to invest in.”

Two years ago, it was a different story. The funds vigorously pushed back against a letter signed by 90 Canadian business and financial leaders, calling for rules to require pension funds to invest more domestically.

But last year’s Trump tariffs have created an elbows-up mood among Canadians, including millions of members of the plans the funds manage. The funds are also confident that Carney – former central banker and Bay Street executive – will seek ways for them to finance national projects without increasing risk or jeopardizing returns. “We can do more together, respecting that they [pension funds] are independent but at the same time looking at opportunities,” Finance Minister François-Phillippe Champagne told CBC in February.

Key sectors: Energy, critical minerals, defence and infrastructure

So what are the strategic sectors that could be targeted for additional investment?

Certainly energy – especially electrification – is one promising area. According to a list of proposals by the Major Projects Office (MPO), the federal agency is looking at a number of clean-energy proposals, including small modular reactors in Ontario, northern hydro projects and a British Columbia transmission line. The Shareholder Association for Research and Education recently released a report saying $220 billion in proposed new investment is threatened unless Canada’s power grid is urgently modernized, a need expected to be a focus of the upcoming federal electrification strategy. Support for clean energy has also been triggered by the recent spike in oil and gas prices caused by the U.S.-Israel invasion of Iran.

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Last week’s $3.8-billion acquisition of Boralex by CDP and Brookfield Asset Management is a sign of growing pension interest in clean energy. The investment “aligns with our commitment to the energy transition and our determination to help build Quebec-based champions,” said CDP executive vice president Kim Thomassin. The investment follows the fund’s $10-billion takeover last year of Innergex Renewable Energy. (CDP is unique among the Maple 8, however, operating with both financial and Quebec development mandates).

Rising oil and gas prices from the Iran war also means that liquified natural gas projects and Alberta’s proposed Western oil pipeline could also be a focus for pension funds. Oil and gas investment hinges on how long the price hikes will last and whether they will minimize the future glut in fossil fuels caused by the global renewable-energy transition. AIMCo is a large investor in Alberta’s oil and gas industry, including a major holding in the Coastal GasLink pipeline. There have been suggestions that the Alberta government may pressure AIMCo to ramp up its provincial oil and gas investments. To date, though, AIMCo has not expressed interest in the proposed oil pipeline.

Critical-mineral projects have also been identified as priorities for the MPO. The federal government adopted a national critical-minerals strategy in 2022, aimed at promoting domestic production and processing. According to the most recent strategy update, there are 140 mining projects planned for development by 2034, worth $72.4 billion in potential investment.

The Carney government’s Defence Industrial Strategy could also create investment possibilities. No defence-related proposals have yet been identified by the MPO. However, the government’s “buy Canadian” approach aligning defence purchases to the battery and critical-minerals sectors, as well as its upcoming electrification strategy, has potential to generate additional defence-sector investment, said New Economy Canada, a coalition of 60 business, Indigenous and labour organizations.

Infrastructure including transport projects, data centres, waste and water facilities, and agriculture also hold future investment potential. CPPIB has already identified data centres as a key area, pointing to its $225-million data-centre investment in Cambridge, Ontario. Transportation, such as the Alto high-speed rail project, also holds potential. CDP is already taking a lead role in this proposal, joining the consortium developing the project.

Reaching out for help from Australia

With such a long list of potential projects, the funds have called on some of their colleagues in Australia to lend a hand.

Representatives of the Maple 8 funds (plus the Investment Management Corporation of Ontario, manager of Ontario government pensions) signed an agreement with a group of large Australian pension funds to foster joint investments. They pointed to “a shared heritage, open and resource-rich economies, strong credit worthiness” and legal institutions as solid terrain on which to build.

Like Canada, Australia has a group of fast-growing pension funds with a relatively small domestic investment market, prompting it to look for partners around the world, particularly for infrastructure investments. IFM Investors, one of the Australian signatories, already invests in two Canadian infrastructure companies, Global Container Terminals in Vancouver and Enwave Energy in Toronto. IFM said it intends to invest up to $10 billion in Canada over the next decade “with the right policy settings in place.”

With this agreement, the funds are exploring possibilities for a larger pool of infrastructure investors, a strategy that would reduce risk for any individual fund.

It’s all about the projects

In the federal budget in November, the government set a target of enabling $1 trillion in total new investments over the next five years in Canada. The government’s charm offensive is aimed at persuading pension funds and other investors to open their wallets to help meet this ambitious target.

Ultimately, it will come down to whether the right projects can be put on the table. Proposals will need to meet three requirements: they’ll need to be in the national interest, demonstrate a high probability of returns that meet or exceed fund benchmarks, and represent an acceptable level of risk. Governments, project proponents and pension funds are looking for investments that check all three of these boxes.

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).

The post Can Ottawa convince Canada’s pension giants to invest at home? appeared first on Corporate Knights.

Those questions go to the heart of this week’s court action by four young Canadians against the world’s sixth-largest pension fund manager, the Canada Pension Plan Investment Board. CPP Investments manages the retirement savings of 22 million Canadians, an ever-growing money pot currently worth more than $750 billion. With a licence to invest those funds into high-return opportunities anywhere in the world, the CPPIB doesn’t just invest in the future – its decisions help shape the future.

The primary duty of any pension manager is to serve the interests of contributors, whether they’re near retirement age of just starting in the workforce. On October 27, four young people who will be retiring after 2050 (the year by which the United Nations hoped to achieve net-zero emissions) announced they are suing the CPPIB for mismanagement of climate risks. They claim that the fund’s continuing investment in fossil-fuel companies delays the energy transition and risks their financial futures.

According to the Toronto not-for-profit Shift Action for Pension Wealth and Planet Health, the CPPIB may have breached its legal duties “by subjecting pension contributions to undue risk of loss from poorly managed climate risk.” The proponents aren’t suing for compensation; their goal is to nail down the meaning of “undue risk” and ensure that the board “does a better job of managing the long-term financial risks of climate.”

Underestimating the risks

Toronto-based Ecojustice, which is representing the four applicants along with Goldblatt Partners, has published a critique of CPP Investments’ “transition risks” model that claims that the pension fund is not accounting for all the long-term negative effects of climate change, “including irreparable loss.” The CPPIB’s worst-case scenario estimates that a “hothouse” world in 2050 would reduce investment returns by just 4%.

“That looks like a wild under-estimate to me,” says Shift senior manager Patrick DeRochie. “You can’t diversify your way out of three degrees of warming. It will become impossible for pension funds to create returns if we fail to get the climate crisis under control.”

“The way CPP Investments is assuming climate risks is not in line with their fiduciary duties. Fossil fuels are a very short-term investment vehicle. By the time I retire, those investments will either be outdated, or the whole economy will have tanked.

 – Travis Olson, plaintiff

One applicant in the suit puts things in simpler language. “Every payday, CPP Investments is using our mandatory pension contributions to fund fossil fuels and worsen the climate crisis,” alleges Aliya Hirji, a 20-year-old self-described community activist who has engaged with climate issues for six years. “By underestimating climate-related financial risks, CPP Investments risks exposing us to reduced retirement benefits, higher contribution rates – or both. We could end up paying more than previous generations and getting less back when it’s our turn to retire.” (Hirji was recognized by Corporate Knights in 2021 as one of Canada’s 30 Under 30 sustainability leaders.)

The four applicants – Hirji, from Vancouver; Rav Singh and Chloe Tse, from Ontario; and Travis Olson, from Alberta – met for the first time this month just prior to filing the lawsuit. Their filing alleges that CPP Investments lacks adequate measures to manage climate-related financial risks.

CPPIB’s commitment to oil and gas

At a time when the Trump administration is working hard to discredit green energy and revive the lagging prospects of the oil, gas and coal sectors, CPP Investments has been surprisingly willing to follow Trump’s lead. In recent months, it has promoted its investment in Canada’s largest oil and gas producer, Canadian Natural Resources, as a model of “long-term partnership and value creation”; it has supported investee companies’ plans for new gas plants and pipelines; and its 11%-owned California Resources Corp. has pushed for looser climate and environmental regulations so it can do more drilling.

Most importantly, last May CPP Investments quietly backed off its 2022 commitment to achieve net-zero greenhouse gas emissions by 2050. “Forcing alignment with rigid milestones could lead to investment decisions that are misaligned with our investment strategy,” the board claims. It prefers to focus “on delivering results, not managing legal uncertainty.”

Here’s how Shift reported on that reversal: “This unacceptable abdication of responsibility by CPPIB stands in stark contrast to other Canadian pension giants, six of which released annual reports this year that unambiguously confirmed that they remain committed to net-zero by 2050.”

The authentic risks from climate change

Scientific consensus maintains that a failure to hold the rise of global average temperatures to below 1.5°C by 2050 will result in significant climate disruptions, reducing crop production and turning arable and forest lands into deserts. “Our case is alleging that CPP Investments is mismanaging our pension fund by failing to adequately respond to climate change,” says applicant Singh. “We should all be concerned that our CPP benefits may not be as dependable as we’d like to think.”

Indeed, CPP Investments may not be the only pension fund underestimating climate risks. A January 2025 report on Planetary Solvency by risk-management experts at the United Kingdom’s Institute and Faculty of Actuaries found that most policy-making organizations are using analytical methodologies that understate the economic risks of climate change. By ignoring “tipping points” such as soil degradation or the melting of Greenland’s ice sheets, “they often exclude many of the most severe risks that are expected and do not recognize there is a risk of ruin.”

The report’s own findings point to a 50% contraction in economic activity between 2070 and 2090, “unless an alternative course is [charted].”

Ironically, the four youths’ suit was announced on October 27, the same day UN Secretary-General António Guterres urged world nations to “recognize our failure” to hit the 1.5°C target. “It is absolutely indispensable to change course in order to make sure that the overshoot is as short as possible and as low in intensity as possible,” he told The Guardian. “We don’t want to see the Amazon as a savannah. But that is a real risk if we don’t change course and if we don’t make a dramatic decrease of emissions as soon as possible.”

CPPIB plays hardball

Reacting to the suit, CPP Investments wrapped itself in the flag. “An action against CPP Investments and its efforts to maintain the sustainability of the CPP is an action against the retirement security of 22 million Canadians,” the fund wrote in a note following the announcement of the lawsuit. “We intend to do whatever is needed to uphold their interests.”

Applicant Travis Olson, a 22-year-old retail worker and labour activist in Alberta, was surprised to see CPP Investments play hardball. “It’s really disappointing to be sent a response like that to such a serious case.” He says the four are acting in the long-term interests of Canadians – not against them.

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“The way CPP Investments is assuming climate risks is not in line with their fiduciary duties,” Olson alleges. Given the increasing cost-effectiveness of renewables, “fossil fuels are a very short-term investment vehicle. By the time I retire, those investments will either be outdated, or the whole economy will have tanked.”

Advisers to the group of four declined to discuss how the youths were selected for this ambitious test case. Karine Peloffy, Ecojustice’s sustainable finance lead, would only discuss the applicants to say, “They’re lovely individuals. They’re passionate, dedicated, and they’re asking good questions.”

For his part, Olson insists that he and his colleagues are more than just a front for activist Toronto lawyers. “Yes, we’re working with them. But we’re the ones in the driver’s seat.”

Rick Spence is the editor-at-large at Corporate Knights. He is based in Toronto.

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Canada’s national pension plan is getting poor marks for failing to pursue its commitments on climate change, even as some of the country’s top plans are taking concrete steps to meet their ambitious goals, says the watchdog group Shift Action for Pension Wealth and Planet Health in a new report.

The post Most Canadian pension funds recognize the urgency of climate change. Some don’t. appeared first on Corporate Knights.

But the financing needs and expansion plans of oil and gas companies are incompatible with CPPIB’s mandate to ensure Canadians’ retirement security by investing “with a view to achieving a maximum rate of return without undue risk of loss.”

It should be obvious that achieving this mandate is dependent on stabilizing global temperatures at relatively safe levels. Canadians require a livable planet on which to retire, and climate scientists and energy modellers are clear that limiting global temperature increase to 1.5℃ and avoiding catastrophic impacts to our ecosystems, economy and financial system requires fossil fuels to be rapidly phased down.

This creates a difficult test for our national pension manager. CPPIB needs to tamp down the Alberta government’s efforts to upend Canada’s retirement fund and reassure Albertans that it provides value for money by delivering superior pension returns. At the same time, CPPIB must acknowledge the dire warnings of climate scientists and navigate the accelerating global market forces that are deterring institutional investors from investing in fossil fuels, of which Alberta is a major producer.

CPPIB appears to have flunked this test.

By caving to Premier Smith’s grievance politics and telling Calgary’s business community that CPPIB will continue to accept undue risk of loss in order to prop up an industry facing inevitable decline, Graham undermined the notion that CPPIB is a prudent arm’s-length pension manager that sits above politics.

He also signalled to Canadians that CPPIB is unwilling to make the difficult but necessary decisions to limit the exposure of the Canada Pension Plan (CPP) to increasingly high-risk fossil fuels.

Graham’s Calgary speech came just weeks after the International Energy Agency published its authoritative World Energy Outlook, which sees global demand for all fossil fuels peaking before 2030, under all scenarios, even if governments neglect to further strengthen and accelerate policies to reduce greenhouse gas emissions in line with climate goals.

By pledging to grow its portfolio of oil and gas assets, CPPIB is making an alarming bet on the world failing to limit global heating to safe levels, putting the CPP at risk from an accelerating energy transition and our retirement security at risk from catastrophic climate change. It’s almost as if CPPIB doesn’t understand that every 10th of a degree of temperature increase makes a livable planet less and less achievable.

Graham said in his Calgary speech that CPPIB holds $6 billion in assets in Alberta’s oil and gas industry, whose emissions continue to increase, putting Canada’s climate targets out of reach. He shared the stage with Teine Energy and Wolf Midstream, two Alberta-based fossil fuel companies owned by CPPIB – neither of which have committed to net-zero emissions.

CPPIB’s reluctance to acknowledge the need to phase out fossil fuels might also be influenced by the oil and gas interests prominently represented on its board. Four of the fund’s 12 directors are concurrently directors or executives of fossil fuel companies, including Kiwetinohk Energy, a Calgary-based natural gas producer and gas plant operator; Capital Power, an Edmonton-headquartered gas plant operator; Domo Gasoline, a western Canadian gasoline retailer; and Wajax Corp, an oil sands equipment and services provider. In case CPPIB needs a direct line to the oil and gas lobby, the president and CEO of the Canadian Association of Petroleum Producers is a former CPPIB executive based in Calgary.

Graham claimed that “some of the most responsibly produced conventional energy in the world is in Western Canada.” This is a fictitious line we expect to hear from oil lobbyists but shouldn’t hear from a prudent pension manager.

Greenhouse gas emissions from a barrel of Canadian oil are among the highest in the world compared with other producers. Studies estimate that methane emissions from Canada’s oil and gas sector are at least 1.5 times higher than reported, and in some cases 15 times higher. Recent research from the University of Calgary concludes that Alberta’s inactive and orphaned oil-and-gas-well problem is “an immense environmental and financial crisis” that could cost between $60 and $120 billion to address. Meanwhile, oil sands companies continue to leak toxic tailings into Alberta waterways with near impunity, contaminating ecosystems and exposing downstream Indigenous communities to harmful chemicals. The Alberta Energy Regulator is widely seen to be captured by the oil and gas industry it’s supposed to regulate.

Graham’s speech also included dubious statements about divestment and the pace of transition away from fossil fuels, claiming that the “global investment community has also changed its tune when it comes to fossil fuel divestment.” Similarly, CPPIB’s chief sustainability officer wrote in CPPIB’s 2023 Report on Sustainable Investing that “consensus has consolidated around the belief that the financial system should be empowered to finance the transition to a low-carbon future rather than mobilized to pursue a divestment agenda.”

This “consensus” is imaginary. The financial system must be aligned with a zero-carbon future, and many investors have stopped pretending that it’s possible to finance the decarbonization of fossil fuels. The only credible pathway to zero emissions for oil, gas and coal companies is to phase out production.

Already, investors with nearly US$41 trillion in assets have at least a partial investment exclusion on fossil fuels. In Canada, the Caisse de dépôt et placement du Québec (CDPQ) divested its oil and coal assets in 2022, while Ontario’s University Pension Plan,  OMERS (the Ontario Municipal Employees Retirement System), HOOPP (Healthcare of Ontario Pension Plan), and IMCO (Investment Management Corporation of Ontario) all announced partial exclusions on investments in fossil fuels in the last year. Globally, some of the biggest pension funds in the world exclude fossil fuels from their portfolios, including Europe’s largest pension fund, ABP, the U.K.’s largest workplace pension scheme, Nest, and the U.S.’s fourth-largest pension fund, the New York State Common Retirement Fund.

There are clear financial reasons that global capital continues to flee the oil and gas sector, particularly Alberta’s oil sands. The industry is facing terminal decline, with billions of dollars of oil and gas assets set to become stranded if Canada and the world are to achieve their climate targets. CPPIB is behaving irresponsibly by pretending that Alberta can extract, refine and burn these assets, when an honest conversation is needed about supporting Albertan communities and workers through the transition away from fossil fuels.

CPPIB CEO John Graham’s response to Premier Smith’s Alberta Pension Plan gambit is entirely predictable. But in telling the world that CPPIB will continue to prop up high-risk oil and gas companies whose business model is fundamentally incompatible with a livable future, Graham must ask himself: is CPPIB behaving like a prudent arm’s-length pension manager investing in the best interests of 21 million Canadians or a cheerleader for an oil and gas industry facing inevitable, structural decline?

It’s impossible for CPPIB to be both.

Patrick DeRochie is the senior manager for Shift Action for Pension Wealth and Planet Health, a charitable project that tracks the fossil fuel investments and climate policies of Canadian pension funds and that mobilizes beneficiaries to engage their pension managers on the climate crisis.

The post Canada’s pension plan shouldn’t be a cheerleader for Alberta’s oil and gas industry appeared first on Corporate Knights.

Ethical investors are starting to turn away from the largest gun and ammo manufacturers and retailers: Sturm, Ruger & Co., Inc. (RGR); Olin Corporation (OLN), American Outdoor Brands Corporation (AOBC), and Vista Outdoor Inc. (VSTO). It’s challenging to get the full list of holdings for mutual funds (they only publish a snapshot twice per year), but ETFs are much more transparent so it’s easy to verify whether they’re firearm free.

 What is the Canada Pension Plan packing?

Unfortunately, there’s no way for Canadians to completely avoid them since the Canada Pension Plan Investment Board (CPPIB) owns $US27 million in shares in three of these companies, according its most recent public disclosures. When contacted by Corporate Knights, CPPIB emphasized these investments were caught up in its passive holdings and are not part of a specific investment strategy to own guns, although the CPPIB along with the Public Sector Pension Plan Investment Board are the only two of Canada’s ten largest pension funds that continue to own any of these gun stocks. Considering the gun stocks comprise less than 0.02% of the pension’s equity investments, they’re not exactly critical to CPP profits and could easily be dumped, if enough Canadians complain.

Pressure mounts on retailers

Weapons makers aren’t the only ones facing scrutiny. There are growing calls for big retailers like Walmart (WMT) to stop selling guns in their stores after 22 people died in the El Paso Walmart shooting in early August. Although Walmart stopped selling assault rifles in 2015 and raised the age limit to buy a gun from 18 to 21, the retailer still accounts for about 20% of ammunition sales in the U.S. with no plans to stop. Additionally, Walmart allows customers to openly carry firearms in its stores in states where it’s legal to do so. Walmart has said that it won’t be making any policy changes and continues to support Republican lawmakers who tend to be against stricter gun controls.

Sustainable Stock Showdown: Walmart vs Dick’s

Investors looking to ditch their shares in Walmart and actively encourage a chain that’s moving away from guns should take a closer look at Dick’s Sporting Goods (DKS). Before last year, Dick’s Sporting Goods had a large hunting department that sold all kinds of guns, including assault rifles. But that changed after CEO Edward Stack learned that the school shooter that killed 17 people in Parkland, Florida had purchased a shotgun at Dick’s. Even though the shotgun wasn’t used in the mass killing, Stack took decisive action and followed Walmart by removing assault rifles from stores and raising the minimum age from 18 to 21.

Going further, Dick’s removed the entire hunting department in 10 stores as a pilot project and hired three Washington lobbyists to push for stricter gun controls. Sales in these stores actually improved, leading the company to pull the hunting department out of an additional 125 locations (roughly 20% of stores) last week. If current trends persist, it’s easy to imagine that Dick’s will stop selling guns altogether.

From a purely financial perspective, Walmart is tough to beat. It is, by far, the largest bricks and mortar retailer in the world with a market cap over 100 times larger than Dick’s Sporting Goods. Walmart has outperformed Dick’s over the last five years, so investors should be cautious in dumping it altogether. But if your goal is to own companies who are more progressive on gun issues, then Dick’s Sporting Goods is a more attractive purchase.

Beta is a measure of a stock’s volatility in relation to the market. By definition, the market has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0. Lower beta means less risk.

Have a company in your portfolio that you want to replace with a more sustainable option? Write us an email or send us a tweet.

Tim Nash blogs as The Sustainable Economist and is the founder of Good Investing.

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