New report shows widening split in climate strategy among major Canadian pension managers
A sharp divergence is emerging among Canada’s largest pension managers on climate strategy, creating material implications for long-term portfolio risk and fiduciary responsibility, according to a new report.
Shift’s 2025 Canadian Pension Climate Report Card, released today (Jan 28), finds that some funds are accelerating climate-aligned investment strategies, while others are stepping back from public commitments and increasing exposure to fossil fuel expansion.
The findings highlight a growing dispersion in climate risk governance, an issue increasingly tied to long-horizon portfolio stability, infrastructure resilience, and systemic economic risk.
The report evaluates 11 of Canada’s largest pension organizations, measuring the credibility and execution of their climate policies. It identifies a widening gap between funds integrating climate risk into capital allocation and those reducing transparency or reversing prior commitments.
This split comes as climate-related disruptions including wildfires, flooding, and extreme heat, continue to generate economic losses, insurance strain, and infrastructure damage nationwide, while global energy transition dynamics reshape investment opportunity sets.
First A grade
For the first time since the benchmark began, a Canadian pension manager achieved an overall grade in the ‘A’ range. La Caisse (formerly CDPQ) secured an A-, driven by its newly launched 2025–2030 climate strategy committing up to $400 billion toward climate action by 2030. The plan emphasizes scaled investment in transition solutions and deeper portfolio integration of climate risk.
In contrast, the Canada Pension Plan Investment Board (CPPIB) recorded the most significant decline in the report, falling to an overall D grade after abandoning its net-zero target.
The report estimates CPPIB will commit $7.1 billion to new fossil fuel and pipeline assets between October 2024 and September 2025. It also notes CPPIB no longer maintains its earlier commitment to invest $130 billion in green and transition assets by 2030 and appears to lack a current publicly disclosed climate strategy.
“The gap between climate leaders and backsliders is no longer a matter of nuance. It’s widened to reveal a fundamental split in how pension managers view their duty to their members,” said Laura McGrath, Senior Manager at Shift. “Leading funds are backing away from risky fossil fuel investments, while laggards continue to bet their members’ retirement savings on climate failure.”
In October 2025, four young Canadians filed a lawsuit alleging CPPIB is failing its fiduciary obligation by inadequately managing climate-related financial risk while continuing to expand fossil fuel exposure.
The report also identifies a disclosure retreat among several major funds. Ontario Teachers’ Pension Plan has not updated its climate strategy in over three years. BCI and PSP Investments lack emissions reduction or climate investment targets beyond 2025 and 2026. AIMCo has not released climate disclosures since 2023 and received a second consecutive F grade.
“A child born this year will turn 25 in 2051 and 65 in 2091,” said Kevin Philipupillai, Research Lead at Shift. “As an author of this report and as someone whose first child will be born in the coming weeks, I am looking for pension managers to protect our future through a worsening climate crisis and a decarbonizing global economy. Attempting to go quiet on climate risk is not a strategy.”
The University Pension Plan maintained a leadership position with a B+. OMERS improved into the B range. HOOPP held steady at C while implementing its climate plan and partial exclusions on new coal and oil investments.
