The investment arm of the Canada Pension Plan has scrapped its commitment to achieving net zero greenhouse gas emissions, making it the only large Canadian pension fund to abandon the sustainable pledge.
CPP Investments, a Crown corporation managing some $700 billion on behalf of millions of Canadian workers and retirees, disclosed the move in a Frequently Asked Questions page on its website, which was updated on Wednesday.
The pension fund first announced its commitment to making its investment portfolio and operations net-zero by 2050 three years ago. But now, it says it is under increasing pressure to adopt greenhouse gas emissions metrics and interim targets that don’t align with the “complexity” of its global investment portfolio.
“In reality, we have not changed our approach to climate in how we invest — it’s more about coherence and consistency,” Michel Leduc, managing director of public affairs and communications at CPP Investments, wrote in an emailed statement to the Star.
“What hasn’t changed are the actions we take to integrate sustainability into our investment strategy. We continue to expect investment due diligence processes to identify material sustainability factors, including those related to climate change, and integrate the findings into investment decisions and ongoing asset management.”
Critics, however, believe the move represents a form of greenwashing.
“What it looks like to me is that they don’t feel that their commitment from 2022 was credible,” said Patrick DeRochie, senior manager at advocacy group Shift Action for Pension Wealth and Planet Health.
“They’ve been touting this for years as being critical to their investment strategy, and all of a sudden they’re quietly saying that they’re backing out,” DeRochie added. “I really think this is unacceptable and it’s a big abdication of the Canada Pension Plan investment board’s duty to invest in the best interest of Canadians.”
Climate advocates are concerned that CPP Investments remains invested in fossil fuel infrastructure, despite scientists warning that fossil fuels must be rapidly phased out to ensure a climate-safe future.
CPP Investments did not immediately respond to DeRochie’s comments.
The fund also published its annual fiscal 2025 results on Wednesday. It reported $714.4 billion in net assets as of March 31, up from $632.3 billion a year earlier.
The increase consisted of $59.8 billion in net income and $22.3 billion in net transfers from the Canada Pension Plan.
But the returns on its benchmark portfolios of 10.9 per cent surpassed the fund’s net return of 9.3 per cent.
Investments in the U.S. also grew over the last year, and are now 47 per cent of the $714.4 billion portfolio, despite persistent calls for Canadian pension plans to invest more domestically in the wake of U.S. President Donald Trump’s tariffs.
