Shift report says Canadian pensions hold $93 billion in fossil assets as climate risks climb
Canada’s largest public pension funds still have at least $93.08bn tied up in fossil fuels even as climate‑fuelled losses threaten to blow out to $99bn a year by 2050.
That tension sits at the heart of Shift’s 2025 Canadian Pension Climate Report Card, released in January 2026, which evaluates 11 major Canadian funds and two international peers on how well they are managing climate risk and aligning with net‑zero pathways.
Climate risk is no longer just an ESG talking point
Shift argues that climate change now represents a systemic financial threat to universal owners such as pension funds, not just an issue for individual assets.
The report says “every tenth of a degree of warming beyond 1.5°C” increases the likelihood of climate tipping points and cascading effects that could undermine the global economy and the financial systems long‑term investing relies on.
According to the World Meteorological Organization, 2025 and the preceding decade are set to be the 11 warmest years on record, with greenhouse gas concentrations rising further after a record high in 2024.
Shift adds that insurance industry data suggest combined losses from extreme weather in Canada could jump from a record $8.5bn in 2024 to $99bn annually by 2050—$25bn in home insurance claims and $74bn in uninsured losses.
Two very different approaches: CPPIB vs La Caisse
The starkest contrast in the report is between the Canada Pension Plan Investment Board (CPPIB) and the Caisse de dépôt et placement du Québec (La Caisse).
CPPIB, which manages more than $777bn for over 22m Canadians, “quietly abandoned its net‑zero commitment in May 2025,” according to Shift.
The report notes CPPIB never set interim targets, continued to finance fossil expansion, and then cited “recent legal developments in Canada” when it dropped the goal—a reference Shift links to new rules on “false, misleading, or unsupported environmental claims” under Bill C‑59.
It also says CPPIB appears to have walked away from its headline pledge to invest $130bn in “green and transition assets” by 2030, since that figure no longer appears in its 2025 reporting.
From October 2024 to October 2025, CPPIB committed at least $7.1bn in new capital to oil, gas, coal and pipeline assets, by Shift’s estimate.
The report highlights CPPIB’s decade‑long backing of Canadian Natural Resources Limited and quotes CEO John Graham, who said in September 2025, “Here in Canada, we like pipelines. We like oil and gas pipelines. We have Wolf Midstream (Inc.) in Alberta.”
Shift argues CPPIB now has no disclosed climate strategy and says its 2025 climate‑related financial disclosures “severely underestimated” the impact of a “hot‑house” scenario on its mandate.
The fund ends 2025 with a D overall score and faces a lawsuit, Hirji et al v. Canada Pension Plan Investment Board, in which four younger contributors allege CPPIB is failing to manage climate‑related financial risks in their best interests.
La Caisse takes almost the opposite route. It manages more than $496bn for 6m Quebecers and, according to Shift, has treated climate as central to its fiduciary responsibility.
The fund set portfolio‑wide carbon targets in 2017, linked staff pay to climate goals from 2018, co‑founded the Net‑Zero Asset Owner Alliance and has completed its exit from coal mining and oil production.
By 2025, La Caisse had cut its portfolio emissions intensity by 69 percent below 2017 levels and finished exiting oil producers and coal.
Instead of easing off, it launched a 2025‑2030 Climate Strategy and Transition Financing Framework focused on “real‑world decarbonization” and pledged $400bn to “climate action” by 2030 across climate solutions and decarbonization investments.
According to Shift’s summary of La Caisse’s disclosures, as of December 31, 2024 the fund had:
- $79bn in companies with Paris‑aligned decarbonization objectives certified by the Science Based Targets initiative
- $15bn in companies working toward that certification
- $58bn in “low‑carbon assets” that help mitigate or adapt to climate change
It had also deployed $6.2bn of a $10bn transition finance envelope aimed at high‑emitting sectors, with those companies expected to reduce their carbon footprint 46 percent by 2030 and 58 percent by 2035 from 2024 levels.
La Caisse earns an A‑ overall—the first Canadian fund to reach the A range in any of Shift’s report cards since 2022.
The Climate Bonds Initiative has endorsed its transition framework.
Shift’s main warning is that La Caisse still needs credible, profitable, science‑based transition plans for its gas distribution and transmission assets in Quebec, theUS and Brazil or it should remove them.
Who else is moving—and who isn’t
Across the 11 Canadian funds, Shift’s overall scores are:
- La Caisse: A‑
- University Pension Plan (UPP): B+
- IMCO: B
- OMERS: B‑
- Ontario Teachers’ Pension Plan (OTPP): B‑
- HOOPP: C
- OPTrust: C
- BCI: C‑
- PSP: C‑
- CPPIB: D
- AIMCo: F
UPP stands out with a net‑zero 2040 target, detailed stewardship plan and climate thresholds for investments.
According to Shift, its public equity fossil holdings are now no more than 0.5 percent of assets, even though it has not yet formally excluded oil and gas.
OMERS has exceeded its 2030 intensity target and continues shifting capital from fossil infrastructure to electrification, storage and renewables.
BCI, HOOPP, OPTrust and PSP have made progress on data, targets and sustainable bonds, but still lack full portfolio‑wide net‑zero commitments and robust fossil exclusions.
AIMCo receives an overall F and, according to Shift, did not mention climate or climate risk in its 2024 annual report and has not published climate‑related financial disclosures since 2023, despite a 2024 responsible investment policy that committed to such reporting.
Greenhushing and what comes next
Shift says 2025 saw a rise in “greenhushing,” with several funds pulling back on climate communications—often citing Bill C‑59 or reacting to anti‑ESG politics in the US.
The report points to AIMCo’s silence, CPPIB’s emphasis on fossil assets while dropping net‑zero, and less urgent language from OTPP and PSP. It notes that AIMCo, CPPIB, OTPP and PSP all had at least one director who also sat on a fossil fuel company board in 2025.
Shift plans to tighten its scoring rubric in 2026.
It says funds will not be able to reach the A range without clearly excluding coal, oil and gas expansion and the financing of such projects, and that more weight will go to evidence of real‑world decarbonization and credible phase‑out or wind‑down plans for existing fossil assets.
