The Caisse de depot et placement du Quebec brought home a glowing report card and the Canada Pension Plan Investment Board (CPPIB) was sent to the detention room in the latest annual assessment of Canadian pension plans' climate performance, published this week by Shift Action for Pension Wealth and Planet Health.
La Caisse received an average ranking of A-, with scores between A- and A+ on four of the six criteria in Shift's rating scale, matching the scores of two European pension funds that the Toronto-based non-profit evaluated for comparison purposes. CPPIB netted an average mark of D, with failing grades on three of the six measures.
Only the Alberta Investment Management Corporation (AIMCo), a fund with a long history of political interference and fossil industry allegiance, saved the CPP from a last-place finish, netting an average score of F.
Shift assessed a total of 11 national and provincial pension funds and reported a "stark and widening divide" across the sector. "While climate leaders are advancing ambitious strategies, scaling up climate investments, and embedding climate risk into portfolio decisions, backsliders are going quiet on climate, retreating from commitments, and expanding fossil fuel exposure," the group states on the landing page for the report.
That exposure will harm the funds and the tens of millions of Canadians who depend on them to secure their pensions, Shift Executive Director Adam Scott told The Energy Mix, by exposing pension fund investments to much greater climate and stranded asset risk while missing the financial gains in the energy transition.
The difference in approach matters because, "with a collective $2.7 trillion in assets under management, these pension funds play a critical role in shaping Canadians' exposure to climate-related financial risk," the report card says. "Credible strategies to align pension portfolios with a safe climate are not optional-they are required to meet fiduciary obligations, as minimizing global temperature rise will result in the strongest long-term financial outcomes for plan members."
The report acknowledges "genuine progress from the Canadian pension sector over the last four years" in addressing climate risk, but warns that those moves haven't matched the scale of the challenge. "What remains to be determined is how quickly policymakers and institutional investors come to the realization that the consequences of inaction are catastrophic and that the transition is inevitable-and act accordingly. The longer they wait, the greater the cost."
Those costs will fall disproportionately on the youngest beneficiaries in pension plans' memberships-and the report spotlights the legal action that four young Canadians launched in October, 2025, alleging that CPPIB has failed to protect their retirement savings from the financial risks brought on by climate change.
"Climate failure threatens all pension members' retirement security, but it is younger contributors and beneficiaries who stand to lose the most," Shift states. "Most workers who were under 40 in 2025 will not begin drawing from their pensions until after 2050. These generations have lived their entire lives on a rapidly warming planet, and the actions taken today will determine the extent to which climate breakdown defines their future."
Scott said the difference in performance between the leading and lagging pension funds comes down to basic literacy.
"If you really don't understand climate change, your reaction is to treat it as a small, narrow thing that can be managed like a nice-to-have," he said in an interview. When a fund like CPPIB communicates a view that the value of its portfolio will only slip slightly in a "hothouse" scenario of 3C average global warming, "it demonstrates immediately that they really don't understand this problem at all, and that would explain why they're behaving as if it's not a crisis."
That gap in understanding amounts to "a seriously dereliction of their job," he said, "which is a very serious and problematic thing that we're highlighting."
Scott attributed that view to a 1990s attitude across much of Canada's financial sector that lumps climate change in with a menu of other corporate social responsibility issues that are seen as optional. "It's part of the marketing department," he told The Mix. "And in Canada, there's a big part of Bay Street that has a financial incentive not to understand climate change or to care about it," with bonus structures and compensation that encourage finance professionals to look at short-term considerations, rather than bigger-picture climate concerns.
At CPPIB, he said, that picture includes a power and infrastructure team "whose goal is to go and find distressed oil and gas assets and buy them," a mandate that shows how the fund "hasn't appropriately set up the team for success on climate. You have a bunch of people who are incentivized not to care about it."
The report card includes a comparison between the two contrasting funds, La Caisse and CPPIB, noting that La Caisse is the first Canadian pension manager to receive an overall rating in the A range since Shift issued its first report card in 2022. The fund, which manages $496 billion in investments on behalf of six million Quebecois, has cut the emissions intensity of its portfolio by 69% from 2017 levels, completed its exit from coal and oil production, pledged $400 billion in investments in "climate action" by 2030, and launched a new strategy that focuses on decarbonizing the real economy.
The fund "has shown an understanding of systemic risk, the pace of the energy transition, and its obligations to beneficiaries and contributors," Shift says. "The investment manager has set climate targets early, achieved them, and then followed up with more ambitious targets."
Scott said La Caisse consistently demonstrates a serious understanding of climate risk, "up to the highest level of governance in the institution," with public communications that show a deeper understanding of the problem. The fund has eliminated conflicts of interest on its board, and has aligned its incentives by directly linking executive bonuses to achieving the organization's climate objectives.
By contrast, Scott says he saw one institutional fund manager from Europe roll their eyes at the mention of CPPIB. "I've had finance managers just gave that face, like, 'really? Still? They still don't get it? What year is it?'" he told The Mix.
The report card says CPPIB "quietly abandoned" its commitment to net-zero emissions in May, 2025, after refusing to set interim emission reduction targets and continuing to invest in fossil fuel expansion. It dropped its previous pledge to invest $130 billion in "green and transition assets" by 2030, then poured another $7.1 billion into oil, gas, coal, and pipeline investments between October 2024 and October 2025, bragging about its stake in at least one company whose path to profitability "relies on increasing greenhouse gas emissions and locking in high-risk fossil fuel dependence."
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Source: The Energy Mix
