Shift Action report exposes CPPIB as top fossil fuel backer amid climate crises
A report from Shift Action for Pension Wealth and Planet Health paints a concerning picture of the Canadian Pension Plan Investment Board (CPPIB) as the most significant backer of fossil fuel investments within the Canadian pension sector.
Despite some Canadian pension funds making modest adjustments to their climate policies in 2023, the CPPIB, managing the retirement savings of over 22 million Canadians, is highlighted for its “ideological commitment to fossil fuel investment,” lagging behind international standards in climate urgency and fossil fuel exclusion from their portfolios.
According to Corporate Knights, the report underscores a disconnect between the extreme weather events experienced in Canada's warmest year on record and the actions of the country's largest pension managers.
The long-term investment nature and fiduciary duty of pension funds demand a proactive approach to protecting members against climate impacts, yet Canadian funds seem to have “missed the message” of the international community on the primary drivers of the climate crisis.
While some funds have embarked on ambitious climate strategies, the CPPIB's approach has been critiqued for lacking in climate urgency, falling from a B to a C rating in this category compared to the previous year.
Additionally, the CPPIB has been called out for not pressing its owned companies to publish science-based net-zero targets or reduce fossil fuel production.
Despite this, Lisa Baiton, CEO of the Canadian Association of Petroleum Producers, and former head of global affairs at CPPIB, praised the fund for its support of the energy sector.
The report also addresses the broader issue of greenwashing and inconsistent asset disclosure among Canadian pension funds, making it challenging to assess their performance accurately.
Shift Action contrasts Canadian pension managers' reluctance to divest from fossil fuels with leading international funds that have committed to phasing out such investments in alignment with climate safety goals.
Among the 11 Canadian funds evaluated, the report categorizes them into three tiers based on their climate policy progress, with CPPIB and others receiving lower grades for their investment strategies and fossil fuel exclusions.
In contrast, international funds from the Netherlands, France, and New York City scored higher, highlighting a more aggressive stance towards aligning with the Paris agreement and excluding fossil fuels.
