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.

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.

With yet another investment in fossil fuel expansion, our national pension manager continues to bet on climate failure and puts Canadians’ retirement security at risk. CPPIB cannot continue to pretend it is committed to achieving its net-zero obligations while allocating billions of dollars of Canadians’ savings into the causes of the worsening climate crisis.

With its Climate Transition Investment Framework, UPP continues to ignore the scientific imperative to phase out fossil fuels. Ongoing failure to name the primary cause of the climate crisis and clearly signal to markets the need for a phase-out of fossil fuels will undermine the important climate leadership UPP is otherwise demonstrating in Canada’s financial sector.

Climate Engagement Canada’s (CEC) first Net-Zero Benchmark company assessments reveal how off-course Canada’s top carbon emitters are in aligning with climate safety and respect for Indigenous rights. With this valuable data in hand, CEC investors must double down to engage companies forcefully and with escalation. At the same time, investors should not waste their time trying to engage the oil and gas sector, which has no profitable or credible pathway to net-zero other than phasing out production.

A company privately owned by the Canada Pension Plan Investment Board (CPPIB) announced this morning that it’s spending CA$6.2 billion to increase its oil production by 60%. Ongoing, reckless investment in fossil fuel expansion by Civitas Resources (Civitas) makes a mockery of the CPPIB’s net-zero emissions commitment and gambles the retirement savings of millions of Canadians on climate failure. 

The Healthcare of Ontario Pension Plan (HOOPP)’s new Climate Strategy puts HOOPP in a position to take a major step forward, but a close look at the details demonstrates that these targets are not yet aligned with achieving the goals of the Paris agreement.

Financial stability depends on climate stability. Canada’s financial regulators will be unable to fulfill their role of ensuring financial stability and ensuring public confidence in the Canadian financial system, including protecting the hard-earned pensions of Canadians, without putting our financial sector on track for 1.5°C.

The Taxonomy Roadmap Report from the Sustainable Finance Action Council (SFAC), released today, fails to fully live up to its promise of ending greenwash and providing clarity in financial markets as Canada grapples with addressing a global climate emergency.

Today, the Investment Management Corporation of Ontario (IMCO) took a big step towards a credible plan that can put it on track to meet its “net-zero by 2050 or earlier” commitment. IMCO’s new Climate Action Plan underscores growing acknowledgement from Canadian pension managers that investments in fossil fuels must be phased out to protect the global climate and beneficiaries’ retirement security.

Shift welcomes OPTrust’s commitment to net-zero emissions by 2050 and the pension fund’s recognition of the urgency of the climate crisis, which OPTrust calls “an immediate threat to [its] portfolio that it cannot afford to ignore.” However, OPTrust’s Climate Change Strategy continues to fall well short of a credible climate plan, lacking core elements such as interim targets to reduce emissions and clear goals and expectations for climate engagement of owned companies.

At a time when the OTPP has made ambitious goals to align its investment strategy with addressing the climate crisis, it is bizarre that newly-chosen Directors appear to lack the required climate expertise needed to implement the OTPP’s net-zero commitment.

The OTPP continues to demonstrate national leadership in aligning the retirement savings of its members with a safe climate future. But despite its increasingly sophisticated strategy to manage climate-related financial risks, the OTPP is silent on how its massive oil, gas, pipeline and and related infrastructure investments have a credible, science-based pathway pathway to decarbonization.

The University Pension Plan’s (UPP) newly released Climate Action Plan, including its net-zero emissions by 2040 commitment, has unequivocally established the fund as a climate leader in Canada’s pension sector. It’s clear that the UPP is listening to, learning and acting on the concerns of its members, including those who are experts in climate science, sustainable finance and climate and energy policy.

IMCO is taking the first steps towards building a credible climate plan. It has committed to net-zero emissions across its portfolio by 2050 or sooner, but still needs to set interim targets to reduce the emissions of its portfolio and scale up investments in climate solutions.

Shift welcomes the release of the Climate Engagement Canada Focus List. Company engagement is an essential part of any credible finance institution’s zero-emissions transition strategy. There are however, some important caveats to engagement which must be considered, especially when it comes to oil and gas companies.

Today’s release of the Public Sector Pension Investment Board’s (PSP Investments, or PSP) first Climate Strategy is a notable step forward in moving the pension fund’s investment strategy towards alignment with protecting the retirement savings of federal employees and averting catastrophic climate change.

The OTPP reduced portfolio emissions intensity by 32% and absolute emissions by 13% between 2019 and 2021. But the $242 billion pension fund continues to have significant problems with transparency and credibility when it comes to reconciling its climate commitments with its investments in high-risk fossil fuels.

HOOPP has lagged its peers on climate, but is finally laying the groundwork needed to catch up. Shift Action for Pension Wealth and Planet Health is encouraged to see the fund finally starting to develop and announce pieces of a credible climate strategy.

CPP Investments (CPP) has taken an important step today in recognizing that the long-term success of our national retirement fund is directly linked to addressing the climate crisis. While Shift is relieved to see the CPP finally catch up with its peers in making this essential net-zero commitment, the fund does not yet have a credible plan for achieving it and decarbonizing its significant fossil fuel assets.