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.

Canada’s national pension manager, the Canada Pension Plan Investment Board (CPPIB), claims it’s committed to net zero emissions by 2050. Yet CPPIB has tens of billions of dollars invested in fossil fuel companies that lack credible transition plans and are expanding and prolonging the use of oil and gas– the primary drivers of climate-wrecking emissions. The actions of these companies do not appear to align with CPPIB’s climate commitments, and expose our national retirement savings to unacceptable risks as the climate crisis worsens and the transition away from fossil fuels accelerates.

Here’s what some of the CPPIB’s fossil fuel companies have been up to in the last quarter.

Last week, the Canada Pension Plan Investment Board (CPPIB) released its Fiscal Year 2024 annual report, growing our national pension portfolio to $632 billion and reporting some progress towards CPPIB’s net-zero by 2050 commitment.

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

In deciding whether or not to support a shareholder proposal calling for full disclosure of Enbridge’s scope 3 emissions on May 8th, Canada’s largest pension funds need look no further than their own policies, reports or membership in Climate Engagement Canada.

On May 8th, Enbridge is holding its Annual General Meeting (AGM), where the shareholders and executives of Canada’s largest fossil fuel pipeline company will gather to make key decisions about the coming year. Shareholders will be voting on a proposal asking the company to “annually disclose all of its scope 3 emissions using accepted definitions and in absolute terms.”

For Canada’s pension sector, voting for the scope 3 emissions proposal at Enbridge’s AGM should be a no-brainer.

HOOPP’s 2023 Annual Report and 2023 Climate Disclosure, released in March, recap HOOPP’s inaugural Climate Strategy, describe a number of incremental improvements to the pension fund’s internal management of climate-related risk and provide moderately increased transparency to beneficiaries. If HOOPP can acknowledge the limits of engagement with fossil fuel companies and reduce its exposure to this declining industry, then the pension fund would be well on its way to protecting its portfolio from stranded asset risk.

CPPIB has tens of billions invested in fossil fuel companies that are expanding and prolonging the use of oil and gas. The actions of these companies do not appear to align with the CPPIB’s climate commitments, and expose our national retirement savings to unacceptable risk as the fossil fuel industry faces terminal decline and the energy transition accelerates.

Here’s what some of the CPPIB’s fossil fuel companies have been up to in the last quarter.

Canada’s largest public pension funds claim that they need to stay invested in fossil fuels so that they can use their influence to help companies reduce greenhouse gas emissions. But an analysis of shareholder votes at recent investor meetings for big banks and fossil fuel companies shows most pension funds aren’t even doing the bare minimum. Pension funds are largely voting against climate-related shareholder proposals and allowing company directors to ignore growing climate-related financial risks. Some pension funds won’t even disclose to their members how they’re voting. 

Yesterday the Canada Pension Plan Investment Board (CPPIB) released its annual report for the fiscal year ending March 31, 2023. With $570 billion in assets under management, the CPPIB is making big and growing investments in climate solutions and taking a more sophisticated approach to managing climate-related financial risks. But a close read of its 2023 annual report shows Canada’s national pension manager continues to obscure its exposure to and prolongation of the fossil fuel economy while failing to understand that its mandate will be impossible to fulfill without urgent action to avert catastrophic climate change. The CPPIB has considerable work to do to establish a credible climate strategy. Read about the good, the bad and the ugly of the climate and energy highlights from the CPPIB’s 2023 annual report.

Last month, BCI released its 2022 ESG Annual Report, which provides further evidence that BCI is responding to calls from pension plan members for increased disclosure of how it is handling climate-related financial risks. In some ways, BCI is demonstrating climate leadership in the Canadian pension sector, but a close read shows that BCI’s strategy has an overreliance on false climate solutions like carbon capture, utilization and storage (CCUS) and carbon offsets, a fatally flawed approach to engaging fossil fuel companies, and a lack of a plan to disclose credible, science-based climate plans for its growing portfolio of fossil fuel assets.

PSP’s updated Sustainable Investment Policy and Corporate Governance and Proxy Voting Principles , and 2022 Green Bond Impact Report are further evidence that PSP is becoming more proactive in managing climate-related financial risks and encouraging portfolio companies to develop credible climate plans, but overall, PSP is not yet treating “systemic climate change risk” like a global emergency that could make it impossible to meet PSP’s financial obligations and invest in the best interests of contributors and beneficiaries. 

The financial sector is making voluntary net-zero commitments, but Canada's financial system continues to make investments that are fuelling the climate crisis. This 'say-do' gap puts our climate, economy, and the savings of everyday Canadians at risk. A new report, Roadmap to a Sustainable Financial System in Canada, shows why regulations are needed now to align Canada's federally-regulated financial flows with its climate goals.