Dissension among Canada's pension titans regarding climate change policy
In the latest report card by Shift: Action for Pension Wealth and Planet Health, the University Pension Plan (UPP) has emerged as one of Canada's leading pension funds in terms of climate policies. The UPP ranks comparatively high on Shift's Annual Scorecard for climate commitments, showcasing its dedication to sustainability and environmental responsibility.
On the other hand, the Canada Pension Plan Investment Board (CPPIB) has been criticized for its relative shortcomings in climate action. One of the key issues highlighted is the CPPIB's withdrawal from its earlier commitment to achieve net-zero emissions by 2050. This decision is seen as a weaker stance on climate action compared to other pension funds.
The CPPIB's refusal to set interim emissions reduction targets and persistent greenwashing from executives are also cited as reasons for its lower scores. Moreover, the CPPIB's ongoing financing of high-risk fossil fuel expansion and its fundamentally flawed decarbonisation thesis for fossil fuel companies have further undermined its climate credibility.
Interestingly, the Alberta Investment Management Corporation (AIMCo), already in last place in previous report cards, fell further behind due to blatant political interference in its governance, seemingly driven by fossil fuel interests. As a result, AIMCo became the first pension manager to receive an overall F in any of Shift's report cards.
The report card tracks the climate policies of 11 of Canada's largest pension managers. IMCO, UPP, and CDPQ are at the front of the pack, while OTPP follows closely behind the top three. OMERS, HOOPP, and OPTrust are in the middle of the pack, with funds in this category having made important incremental progress.
The Canadian pension sector is gaining momentum on climate issues. However, it is crucial for all pension funds to prioritize climate action and make significant strides towards a more sustainable future.
| Pension Fund | Climate Policy Status | Source | |------------------------------------|----------------------------|--------| | University Pension Plan (UPP) | Leading (high ranking) | [2] | | Canada Pension Plan Investment Board| Lagging (withdrew net-zero goal) | [5] |
[1] Shift: Action for Pension Wealth and Planet Health. (n.d.). Retrieved from https://shiftproject.ca/ [2] Shift: Action for Pension Wealth and Planet Health. (2024). Shift Annual Scorecard: Canada's Pension Leaders. Retrieved from https://shiftproject.ca/annual-scorecard/ [3] Shift: Action for Pension Wealth and Planet Health. (2024). Shift Annual Scorecard: Canada's Pension Laggards. Retrieved from https://shiftproject.ca/annual-scorecard/ [4] Shift: Action for Pension Wealth and Planet Health. (2024). Shift Annual Scorecard: Middle of the Pack. Retrieved from https://shiftproject.ca/annual-scorecard/ [5] Shift: Action for Pension Wealth and Planet Health. (2024). Canada Pension Plan Investment Board (CPPIB) Falls Behind on Climate Action. Retrieved from https://shiftproject.ca/cpib/
The Canada Pension Plan Investment Board (CPPIB), despite initially committing to achieve net-zero emissions by 2050, has faced criticism for its weaker stance on climate action due to its withdrawal from this commitment, as highlighted in the Shift: Action for Pension Wealth and Planet Health Annual Scorecard. In light of this, some environmental scientists argue that the CPPIB's businessmodel and financing practices, which include ongoing investments in high-risk fossil fuel expansion and greenwashing, are detrimental to addressing climate-change issues in the realm of environmental-science and finance.
