Lawsuit claims CPP Investments' climate models put retirement security at risk for future generations
Canada’s largest pension fund faces a landmark legal challenge as a group of young Canadians alleges that the Canada Pension Plan Investment Board (CPP Investments) is jeopardizing the retirement security of millions by underestimating the financial risks of climate change.
Benefits and Pension Monitor reports that plaintiffs filed the lawsuit in Ontario Superior Court.
This is the first case in Canada to contest a pension fund’s climate risk strategy and the first globally to focus on the duty of impartiality across generations.
The plaintiffs—Aliya Hirji, Travis Olson, Rav Singh, and Chloe Tse—are represented by Ecojustice and Goldblatt Partners LLP.
They claim that CPP Investments, which manages nearly $732bn in assets for over 22 million contributors, is breaching its fiduciary duty by continuing to invest in fossil fuels and failing to adequately assess climate risk.
The case asserts that CPP’s climate modelling does not account for the long-term financial consequences of global warming, particularly for younger Canadians who will retire after 2050.
Central to the lawsuit is the allegation that CPP Investments relies on flawed “black box” climate models that underestimate future economic damage and create a misleading sense of security.
The plaintiffs argue this approach exposes the fund—and ultimately Canadians—to the risk of reduced retirement benefits or higher contribution rates.
“Without action to curb fossil fuels, we are on track for a 3°C warming by the end of this century. Economists warn that it would be like experiencing the Great Depression forever,” said Karine Peloffy, lawyer and sustainable finance lead at Ecojustice.
She noted that CPP Investments reports only a 4 percent net present value loss in a ‘hot house world’.
The case alleges that by “recklessly downplaying one of the greatest threats to the pensions’ long-term value, CPP Investments is effectively flying blind to the real risks of climate change and failing to protect the pensions of young Canadians who will retire after 2050.”
The legal action comes in the wake of CPP Investments’ recent decision to quietly step back from its net-zero commitment, a move that has intensified scrutiny from climate and pension advocacy groups.
The plaintiffs are seeking a court ruling that would compel CPP Investments to better account for and disclose climate-related financial risks and to align its investment strategy with a stable, sustainable future.
Benefits and Pension Monitor reports that applicants like Rav Singh and Travis Olson want to ensure financial sustainability in a world that will look markedly different due to climate change.
“Thousands of people are fleeing their homes and losing their livelihoods, while entire towns are burning to the ground,” said applicant Aliya Hirji.
She expressed concern that “CPP Investments is investing billions of dollars in fossil fuel expansion.”
Hirji added that she needs the fund to be sustainable for the next 75 years and more, but believes her pension contributions are being used to “fund the climate crisis,” while CPP Investments tells her to be confident in the fund’s future.
In a statement, the group explained that the case argues “CPP Investments’ reported climate modelling drastically underestimates the financial risks of climate change to the Canada Pension Plan.”
They noted that this is the first time a Canadian investor has been sued for mismanaging climate risks.
Globally, it is also the first climate case against a pension fund investment manager anchored in the duty of impartiality and even-handedness in a multi-generational context.
The group emphasized this means “the duty to act fairly towards young contributors who will retire after 2050 when climate-related financial risks will be even greater.”
Benefits and Pension Monitor reported that CPP Investments responded that it will address the matter through the courts if necessary.
Michel Leduc, senior managing director for public affairs and communications at CPPIB, stated, “CPP Investments has a clear legislated objective: we invest to maximize long‑term investment returns without undue risk of loss and manage the CPP Fund in the best interests of CPP contributors and beneficiaries.”
He emphasized, “To be clear, an action against CPP Investments and its efforts to maintain the sustainability of the CPP, is an action against the retirement security of 22 million Canadians. We intend to do whatever is needed to uphold their interests.”
Leduc added that CPPIB respects Canadians’ right to express their views on how the fund is managed.
He said their focus remains on “integrating climate-related considerations into our investment activities, all while remaining focused on disciplined, evidence-based investing and transparent reporting consistent with our mandate and Canadian law.”
