An Open Letter to Clients and Investors of NEI Investments

So you really think your investments are ethical, or for that matter, secure?

Albertans are rightfully concerned about 107. Submission_NEI Investments_ investor collaboration_Signatories made by NEI Investments to the Alberta Climate Panel and a supporting document Transitioning to a Low-carbon Energy System NEI [1] Your group has been identified in Submission 107 suggesting that, by proxy, your group is in agreement with the views presented in this submission.

Your group is influentially affecting the economy of Albertans and Canadians in what we believe to be damaging and unethical ways.


It is our understanding that bodies dealing in securities and investments must employ continuous disclosure related to material evidence and must state uncertainties. We believe NEI to have failed in this regard on the issue of climate change and ‘carbon risk’ and other market factors.

  1. Outdated climate information: Are your investments at risk due to reliance on outdated scientific premise and extreme assessment of carbon risk? In the document “Transitioning…” NEI notes that since 2001 you have accepted a catastrophic view of human influence on climate and you relied on the Intergovernmental Panel on Climate Change claims that Greenhouse Gases (especially carbon dioxide) must be reduced to prevent harmful consequences.
  2. 15-year hiatus in global warming, now 18+ years despite a rise in carbon dioxide By 2013 the IPCC reported there had been a 15-year pause (now 18+ years) in warming despite a significant rise in Greenhouse gas emissions, especially carbon dioxide (CO2) which was thought to be the principle ‘knob’ controlling climate change;
  3. Natural influence on climate recognized as driver: In 2007, the Intergovernmental Panel on Climate Change modified its definition of climate change to include natural or human factors as drivers of climate change
  4. Equilibrium Climate Sensitivity revised downward by IPCC: The IPCC revised the low end of the  “Equilibrium Climate Sensitivity” (ECS) likely range downward by half a degree in the AR5 (2013) report,2 meaning that in their opinion warming might only reach 1.5 °C due to a doubling of CO2 concentrations.[2] The climate sensitivity based on observational evidence using the latest estimates of greenhouse and aerosol changes and including long-term natural warming since the Little Ice Age and urban warming is 1.0 ºC, which is a third of that reported by the United Nation’s climate panel. The climate model warming trend from 1980 of the bulk atmosphere is 2.5 times greater than the warming measured by weather balloons and satellites. The climate models are wrong. Judith Curry discusses these uncertainties in climate forecasting in her US Senate Testimony of 2014.[3]
  5. Consensus – In “Transitioning…” you reference ‘consensus’ on climate change. This misleads investors, politicians, and the public. There is only a consensus that warming has occurred since ca. 1850, leaving the cold climate cycle of the Little Ice Age.[4] There is no consensus[5] on the cause of the Current Warm Period (human or natural) which appears to be in the range of the Medieval Warm Period of (800-1250AD). There is no consensus on the ratio of causation, nor on effective mitigation if any, nor cost-benefit of same. Richard Tol, economist and lead author of the IPCC’s Fifth Assessment (AR5) Impacts and Mitigations notes that he and many other economic experts agree that “..a century of climate change is not worse than losing a decade of economic growth.” [6] Numerous qualified climate scientists dispute catastrophic claims; your documents should rightly reflect these uncertainties.
  6. Carbon risk: The US Office of Management and Budget recommends using a range of discount rates from 3% to 7%. The Alberta Climate panel quotes social cost of carbon (SCC) values using a 2.5% discount rate. The FUND model estimates the SCC in 2010 drops from US$29.69 using climate model simulated climate sensitivity to CO2 emissions and a 2.5% discount rate to -US$0.87 using climate sensitivity from the recent peer-reviewed paper Lewis & Curry (2015) and a 5% discount rate. The negative value indicates that CO2 emissions are net beneficial. Taking into account a new 2016 estimates of aerosol forcing, natural warming from the Little Ice Age and urban warming, the SCC drops to about -$15 at a 5% discount rate.
  7. Market Manipulation and Interference in Fair, Efficient, and Open Competition Regulations for power generation in Alberta. NEI investment organization has become a political activist. According to your “Transitioning…” document you have materially affected Alberta and Canadian government policy, based on your reliance on this out-of-date information.
  8. This may put your existing investments in various companies and banks at risk as the measures being imposed due to your advocacy and influence, are detrimental to industry, consumers and the overall economy. The cost of phase-out of coal is estimated to be more than $22 Billion.[7]
  9. It may also put your group at risk for meddling in power generation markets, specifically in Alberta. Your document Getting Real About The Energy Transition ETHICAL INVEST PART OF NEI  [8] you state “Furthermore, denouncing one industry has the potential to reinforce political divisions and stifle rather than advance change.”  Yet on the same page, you say of coal companies: “Coal is the most damaging fossil fuel and we have therefore set the highest expectations for this industry.” Clearly, you are creating discriminatory practices in the Alberta market where some 64% of our power generation (2015) comes from coal. (By contrast both ‘green’ Germany and Denmark operate on some >40% coal which Denmark must import at $60/t. Alberta has an abundant coal supply, a competitive advantage for local industry in terms of low-cost power generation.)
  10. Likewise, in accordance with Fair, Efficient, Open and Competitive (FEOC)[9] regulations in Alberta, it seems that you are distorting the markets with your undue influence, in possible violation of the spirit of FEOC if not the fact, particularly in light of your focus on pushing wind and solar, and carbon pricing, suggesting a Conflict of Interest.
  11. Your claims of being a socially responsible, ethical investor are contradicted by the fact that coal phase-out will result in the loss of at least 7,000 jobs and the destruction of 30 Alberta communities, not to mention burdensome rise in power prices for Alberta consumers and businesses. Similar policies in other jurisdictions have led to double and tripled power prices and wide-spread heat-or-eat poverty. How is this ethical or socially responsible?
  12. The IPCC does not make any recommendations;[10] does not provide supporting evidence for claims on decarbonization versus wide scale renewables. Recent peer-reviewed paper by Cambridge profession Michael J. Kelly illustrates that a ‘low-carbon’ economy will decimate society;[11] analysis by Vaclav Smil shows that all ‘low-carbon’ devices like wind and solar require massive amounts of fossil fuels in their production,[12] making the claim of a ‘low-carbon’ economy an oxymoron and inherently untrue.
  13. Future fossil fuel demand suggests there will be a shortfall in supply unless current investors step up and ensure future supply. [13]

In closing, we believe your investment organization is acting on unsupported ideological claims about climate science, carbon risk, and a non-existent low-carbon economy and your claims are not supported by the evidence or by authoritative bodies.

Further, by aggressively interfering in energy markets regarding the use of coal in Alberta, and by manipulating provincial and federal climate and carbon policies through your investment influence, you put the nation of Canada and your own investments, at risk of economic decline overall.

The current drop in solar activity suggests an imminent solar minimum,[14] which historically has led to unstable weather extremes and a significant drop in regional and even global temperatures.  There is significant uncertainty about climate science predictions and society should be prepared for the possibility of warming or cooling.  In the event of cooling, fossil fuels will be the most valuable stocks.

In our opinion, the market interference by NEI Investments puts the nation’s economy and energy security at risk by an unelected, unaccountable body.  We do not believe this to be in the interests of your investors or the electorate.  We do not believe this to be in keeping with due process, due diligence related to investment offerings, or democratic principles.



Friends of Science has spent a decade reviewing a broad spectrum of literature on climate change and have concluded the sun is the main driver of climate change, not carbon dioxide (CO2). Friends of Science is made up of a growing group of earth, atmospheric and solar scientists, engineers, and citizens.

Friends of Science Society
P.O. Box 23167, Mission P.O.
Calgary, Alberta
Canada T2S 3B1
Toll-free Telephone: 1-888-789-9597
E-mail: contact(at)friendsofscience(dot)org





[4] “warming from 1979-1998”..” only in 19 of last 65 years, 30% has there been CO2 associated with warming” Note: On geologic timescales, CO2 does not correlate with warming, it is rather a consequence of natural warming, only nominally a cause.



[7] >$11 Billion to build new natural gas equivalent capacity based on 8 x 800MW power plants similar to Calgary’s new Shepard Energy Centre (Cost $1.4 Billion); Source of estimate – Evan Bahry, Independent Power Producers Society of Alberta

>$11 Billion compensation for stranded assets. Calculation based on published figures and compiled by independent market consultant Gary Reynolds, former CEO of Alberta’s Balancing Pool.









2 thoughts on “An Open Letter to Clients and Investors of NEI Investments

  1. Pingback: Friends of Science Society Posts Open Letter to NEI Investments and their Clients Challenging Climate Change Stance and Disclosures - Press Release Rocket

  2. Whew. Speaking of out of date? We are having the warmest year ever in the instrumental record. And there is a claim of an 18 hear hiatus. Seems someone needs to bring their criticism up to date.

    15-year hiatus in global warming, now 18+ years despite a rise in carbon dioxide By 2013 the IPCC reported there had been a 15-year pause (now 18+ years) in warming despite a significant rise in Greenhouse gas emissions, especially carbon dioxide (CO2) which was thought to be the principle ‘knob’ controlling climate change;

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