Canada’s $675 billion pension giant, the Canadian Pension Plan Investment Board (CPPIB), is facing intense scrutiny for lagging on climate commitments, according to a damning new report by Shift Action for Pension Wealth and Planet Health. Released on February 19, 2023, The Canadian Pension Climate Report Card exposes stark disparities in how the nation’s pension funds are addressing climate risks, with CPPIB and Alberta Investment Management Corporation (AIMCo) ranking among the poorest performers. As global markets and regulators increasingly prioritize sustainability, critics argue these funds are jeopardizing both the planet and retirees’ financial futures.
Climate Report Card Highlights CPPIB’s Shortcomings
The report evaluates pension funds on their ability to align investments with a net-zero economy by 2050. While funds like Quebec’s Caisse de dépôt et placement du Québec (CDPQ) and Ontario Teachers’ Pension Plan earned praise for proactive climate strategies, CPPIB received a dismal C- grade. Key criticisms include:
- No interim net-zero targets for 2030 or 2040.
- Continued investments in oil and gas projects without clear decarbonization plans.
- Lack of transparency on climate risk management.
Adam Scott, Director of Shift Action, minced no words: “CPPIB claims to support the energy transition, yet it doubles down on fossil fuels. This isn’t just hypocrisy—it’s greenwashing.” Despite managing assets for 21 million Canadians, CPPIB’s reluctance to set science-based targets contrasts sharply with global peers like Norway’s sovereign wealth fund, which has divested from fossil fuels.
AIMCo’s Pro-Oil Leadership Sparks Alarm
Alberta’s AIMCo, graded even lower than CPPIB, faces similar backlash. The fund’s ties to Alberta Premier Danielle Smith’s pro-fossil fuel agenda have deepened concerns. Recent board appointments aligned with oil interests, coupled with zero net-zero commitments, signal a “dangerous disregard for climate realities,” the report states.
Quebec and Ontario Funds Lead the Charge
In contrast, CDPQ and Ontario funds like the University Pension Plan are setting benchmarks:
- CDPQ achieved a B+ for excluding fossil fuel investments and prioritizing renewables.
- Ontario Teachers’ reduced portfolio emissions by 32% since 2019 through green infrastructure bets.
These leaders prove that integrating climate action with financial returns isn’t just possible—it’s profitable.
Political Headwinds and the Anti-ESG Backlash
Canada’s climate progress faces hurdles from rising anti-ESG rhetoric. Conservative leaders, mirroring U.S. Republican tactics, oppose “aggressive” climate policies, advocating instead for oil expansion. This polarization has led major banks like TD and BMO to exit the Glasgow Financial Alliance for Net Zero (GFANZ), undermining collective climate efforts.
Scott argues pension funds must rise above politics: “Unlike banks, pension managers aren’t bound by election cycles. They have a fiduciary duty to address long-term risks—and climate is the ultimate long-term risk.”
Investors Demand Science-Based Accountability
On February 26, 2023, a coalition of 35 Canadian asset owners managing $53 billion issued a urgent plea: institutions must adopt science-based climate targets and transparent reporting. Their message? “Climate risks are financial risks.”
For CPPIB, this means:
- Setting interim 2030/2040 net-zero milestones.
- Divesting from fossil fuels lacking credible transition plans.
- Aligning executive incentives with emission reductions.
CPP Payment Dates 2025 Canada Pension Plan
Conclusion: CPPIB Must Prioritize Climate Resilience
As climate disasters escalate, so do the financial risks for pension holders. While Quebec and Ontario funds prove leadership is possible, CPPIB’s inaction threatens Canada’s retirement security and global climate goals. The message is clear: protecting pensions requires protecting the planet. Will CPPIB rise to the challenge—or let Canadians down?
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