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A recent report from advocacy group Shift: Action for Pension Wealth and Planet Health reveals a growing divide among Canada’s prominent public pension funds regarding their climate action strategies. La Caisse de dépôt et placement du Québec, the second-largest pension fund in the country, is being lauded for its proactive measures, while the Canada Pension Plan Investment Board (CPP Investments) is reportedly lagging behind.
Divergent Paths: La Caisse vs. CPP Investments
According to Shift’s annual ranking, La Caisse has emerged as a leader in the realm of climate commitments, reinforcing its dedication with a detailed five-year strategy aimed at mobilising $400 billion in climate action investments by 2030. “They’ve gone in totally different directions,” remarked Adam Scott, director of Shift, in a recent interview, highlighting the contrasting approaches of the two funds.
In stark contrast, CPP Investments has faced criticism for its retreat from previously established climate targets. The fund abandoned its net-zero goal last year, continues to funnel capital into fossil fuel infrastructures, and appears to have stepped back from its ambitious $130 billion pledge towards green and transitional assets made in 2024. Scott noted, “CPP is a real outlier this year,” emphasising its significant regression in climate policy.
A Troubling Report Card
The newly released 2025 Canadian Pension Climate Report Card assigns CPP Investments a disappointing D grade for its handling of the climate crisis, citing its quiet withdrawal from net-zero commitments. Meanwhile, La Caisse is awarded a commendable A-minus for its forward-thinking strategies. The CPP Investments fund, which manages a substantial $777.5 billion on behalf of 22 million Canadians as of September 30, has not publicly addressed the report’s findings.
Adding to its challenges, CPP Investments is currently facing a lawsuit filed last October, alleging it failed to adequately incorporate climate risk into its investment decisions. In response to the legal action, the fund asserted its ongoing commitment to integrating climate-related considerations throughout its investment processes.
Geopolitical Context and Future Implications
This divergence in climate strategy occurs amidst significant geopolitical changes, with the Canadian federal government intensifying efforts to expand fossil fuel exports. This includes initiatives for increased liquid natural gas production and considerations for a new crude oil pipeline, all aimed at enhancing national energy security.
Despite these challenges, Scott remains optimistic about the global shift toward decarbonisation. He stressed the necessity for pension funds to adopt a long-term perspective on climate investments, much like La Caisse has done by urging investment companies to establish credible transition plans. “If you’re going to invest in anything, you should be clear that it’s positioned to be successful as this transition continues,” he asserted.
Other Canadian pension funds making strides in climate initiatives include the University Pension Plan, Investment Management Corporation of Ontario, Ontario Municipal Employees Retirement System, and the Ontario Teachers’ Pension Plan. Conversely, the Alberta Investment Management Corporation received the lowest ranking in the report, failing to acknowledge climate change in its recent annual report and neglecting to provide climate-related financial disclosures for 2024 or 2025.
Why it Matters
The contrasting approaches of Canada’s pension funds illustrate a critical moment in the intersection of finance and climate responsibility. As public awareness of climate issues grows, the actions taken by these funds will not only affect their investments but will also set a precedent for corporate behaviour across the country. The stakes are high; the future of climate action within the financial sector could hinge on the degree to which these funds embrace or resist the shift towards sustainability.
