Abstract:  This article investigates the evolving concept of fiduciary duty and its role in Canadian public sector pension funds’ environmental, social, and governance (ESG) investing practices. It contributes to the literature in the distinct but related fields of environmental gentrification and urban climate finance by bringing fiduciary debates into sharper focus. Engagement with issues surrounding investors’ legal and ethical duties to invest responsibly can contribute to an enhanced understanding of the global and local mechanisms of production and reproduction of environmental and spatial inequalities, as well as strategies for creating more than just urban futures. ESG, a calculative and modelling technique used to manage investment risks, overwhelmingly focuses on physical and financial climate risks (e.g., infrastructure assets and risks associated with regulatory change). This privileges the instrumental, Cartesian view of the environment as severed from its social, historical, and relational character, a perspective that has been thoroughly critiqued in the environmental/ecological gentrification literature. However, ESG investing has also introduced a potentially productive uncertainty in the realm of financial expertise; it forces questions about what it means to invest deferred compensation in the “best interests” of workers and retirees. This article has three interrelated aims. First, it reviews recent trends in environmental gentrification and urban climate finance literature to highlight an emerging but underdeveloped engagement with ESG and fiduciary duty. Second, it shows how the rise of ESG has revealed a vulnerability in the hegemonic profit maximization interpretation of fiduciary duty and invited further, open-ended, critical-theoretical engagements with the concept of the fiduciary and their responsibilities. Finally, it offers the concept of “fiduciary activism from below” to explore how grassroots agency increasingly stages a direct confrontation with corporations, institutional investors, and shareholders in the struggles over urban space and resistance to environmental and infrastructural violence.

Keywords:  climate risk; environmental gentrification; environmental, social, and governance investing; fiduciary duty; housing and infrastructure financialization; organized labour; public sector pension funds; Toronto

Published:   16 March 2023

Issue:   Vol 8, No 1 (2023): Social Justice in the Green City