In this Climate Pension Quarterly: oil and gas company greenwash; recaps of reports from CPPIB, BCI, UPP and OPTrust; five international pension funds announce fossil fuel exclusions or divestment; IMCO, CDPQ, PSP and OTPP make investments for a safe climate future; escalating climate-related financial risks for companies that Canadian pension funds invest in; Canada Growth Fund in talks with Pathways Alliance; and more.

CPPIB executives disclosed to Canadians at its public meetings that 3.5% of its portfolio – approximately $22.6 billion – is invested in fossil fuels. This is likely an underestimate that omits CPPIB’s significant holdings in fossil fuel private equity, gas and electric utilities and other fossil fuel infrastructure. Following CPPIB’s release of its Second Quarter Fiscal 2025 results in November, Shift calculated that CPPIB has committed at least $3.3 billion of Canadians’ retirement savings in new oil, gas, coal and pipeline assets in 2024.

Amidst a worsening climate crisis and accelerating transition off fossil fuels, pension funds must have leadership that can successfully protect their assets from climate impacts and navigate their portfolios to net-zero. In this context, it is concerning that HOOPP’s incoming President and CEO Annesley Wallace, announced yesterday, will be moving to the fund from her role as an executive vice president at TC Energy, an energy company with a business model that runs in direct opposition to a credible science-based transition plan.

The challenge of managing investments responsibly in the midst of a worsening global climate crisis and an accelerating energy transition is hard enough for any pension fund. But blatant, inappropriate political interference in the governance of the Alberta Investment Management Corporation (AIMCo), Alberta’s “independent” public pension manager, could make prudently navigating these escalating climate risks impossible.

Amidst a worsening climate crisis and an accelerating energy transition, the Canada Pension Plan Investment Board (CPP Investments, or CPPIB) has so far committed at least C$3.3 billion to new oil, gas, coal and pipeline assets in 2024. These investments will either become stranded assets in a decarbonizing world, or they’ll prolong and expand the use of fossil fuels in ways that accelerate the climate crisis, threaten the sustainability of the Canada Pension Plan and undermine the retirement security of Canadians. Either option is a bad outcome for CPPIB.

Over the last month, the Canada Pension Plan Investment Board (CPPIB) held public meetings in eight cities across Canada. These CPPIB meetings, which happen once every two years, are a rare opportunity to engage directly with the staff and executives that manage the $647-billion Canada Pension Plan on behalf of over 22 million contributors and beneficiaries.

British Columbia’s Municipal Pension Plan (BCMPP) continues to lead its fellow provincial public sector pension plans when it comes to climate action, as evidenced by its 2023 Annual Report. However, with all of BC’s public sector pensions managed by the British Columbia Investment Management Corporation (BCI), how much climate progress is truly possible without an investment manager with a credible climate plan?

Engagement can be a useful tool for motivating climate action and increasing shareholder value, but there are obvious limitations on display in Climate Engagement Canada’s (CEC) Second Annual Net Zero Assessment of Focus List Companies. In particular, the ongoing lack of meaningful progress on display from some of Canada’s highest-emitting publicly-traded energy sector companies, undermines the case that sustained investor engagement is the only path to deliver imperative decarbonization results.

Shift’s Executive Director, Adam Scott, was honoured to be invited to testify to the House of Commons Environment Committee, as part of a study on the environmental and climate impacts related to the Canadian financial system. 

In a speech at the PRI in Person conference, Deputy Prime Minister Chrystia Freeland noted the government is continuing to advance reporting requirements and sustainable finance labeling. The government’s directive that a taxonomy must be scientifically aligned with 1.5-degrees is positive. 1.5°C alignment means that a sustainable finance taxonomy must not, by definition, include oil or gas.

In this Climate Pension Quarterly: leadership on pension fund climate-alignment from New York and Europe, Canadian pension funds still misguidedly trying to engage oil and gas companies on climate, and the Canada Pension Plan keeps pouring money into expansionist oil and gas companies – all against the backdrop of "the most challenging summer on record" and its associated financial costs.

This quarter, despite the Canada Pension Plan Investment Board's net-zero commitment, CPPIB portfolio company Wolf Midstream announced a final investment decision of $1 billion to increase gas production to power the petrochemical industry; CPPIB used $1.2 billion from our national pension fund to buy Tallgrass Energy, a 16,000-km U.S. pipeline network operator; CPPIB become the co-owner of California Resources Corporation, California’s largest oil and gas producer; and CPPIB-owned company Encino Energy described our national pension manager as “key to the story” of fracking expansion in Ohio. Read the full stories in Shift’s recap.

The City of Cornwall has joined the cities of Toronto, London, Brampton and Kingston in passing motions or climate plans calling on OMERS to align its investments with a safe climate. Are you an OMERS member who would like to learn more about how municipal employees are working to protect their pensions and the climate? Get in touch.

The Jasper wildfire devastated a community and destroyed homes. It also threatened a public pension fund investment, illustrating how the accelerating climate crisis puts our collective retirement savings at risk. Read the full op-ed from Shift's Laura McGrath in Canada's National Observer.

The Ontario Teachers’ Pension Plan (OTPP) is the 100% owner of Heritage Royalty, a private company that holds royalty rights for approximately 4 million acres of oil and gas producing lands. As the climate crisis accelerates and jeopardizes the retirement security of thousands of Ontario teachers, their families and their students, OTPP members deserve answers from their pension managers about the role this investment has played in increasing oil and gas production and pumping carbon pollution into the atmosphere—and the associated risks Heritage Royalty raises for the pension fund.

In a risky bet on climate failure, the Canada Pension Plan Investment Board (CPPIB) has just announced its fifth investment in private fossil fuel assets this year. The CPPIB is investing $1.2 billion in Denver-based Tallgrass Energy, which operates over 16,000 kilometres of oil and gas pipelines across 14 states.

Faced with mounting calls from beneficiaries to stop financing fossil fuel expansion, the trustees of British Columbia’s public pension plans and their investment manager, the British Columbia Investment Management Corporation (BCI), have continued to highlight BCI’s efforts to engage with ExxonMobil on climate. Unfortunately, BCI’s repeated claims that it wields more influence over the infamous fossil fuel giant by continuing to hold its shares than by divesting do not stand up to scrutiny.

In an op-ed first published by TheFutureEconomy.ca, Patrick DeRochie, Shift’s Senior Manager, analyzes the critical role the Canada Pension Plan has in safeguarding both retirement security and a stable climate for Canadians. To do so, CPPIB must rise above Canada’s petro-politics, end its rampant greenwashing, stop investing our retirement savings in fossil fuel expansion, increase investments in climate solutions and align our national pension portfolio with credible net-zero emissions pathways.

On June 27, 2024, the British Columbia Investment Management Corporation (BCI) released its 2023-2024 Corporate Annual Report. BCI is the pension manager for 740,000 British Columbians, including teachers, health care workers, college and university staff, and municipal and provincial public servants.

Read on for the climate and energy highlights from BCI’s annual report.

Alberta’s public pension manager, the Alberta Investment Management Corporation (AIMCo), is suggesting that its failure to set credible climate targets somehow makes it better at decarbonizing assets. We break down for AIMCo how other pension funds have figured out how to walk and chew gum at the same time. For the sake of its members and beneficiaries, AIMCo must put forward a credible climate plan that navigates its portfolio to zero emissions and puts hard stops on investing in fossil fuel expansion.