Canada Pension Plan Abandons Net-Zero Pledge

The Canada Pension Plan (CPP) is no longer maintaining its commitment to achieving net-zero emissions by 2050.

The $700 billion plan’s investment board (CPPIB) said May 21 on its website that while achieving net-zero emissions remains a widely adopted goal for many countries, companies, and international organizations, it presents “both risks and opportunities for long-term investors.” It said “recent legal developments in Canada” have changed how net-zero commitments are interpreted.

“In particular, there is increasing pressure to adopt standardized emissions metrics and interim targets, many of which don’t reflect the complexity of a global investment portfolio like ours,” said the pension fund’s board on its website on a page explaining its approach to sustainability.

The board did not explain what recent legal developments it was referring to, and had not responded to The Epoch Times’ request for comment by publication time.

The CPPIB had announced three years ago that it was committing to net-zero emissions by 2050, both for its own operations and for its investment portfolio. It planned to achieve carbon neutrality for its internal operations by the end of the 2023 fiscal year, increase its investments in green and transition assets from $67 billion to at least $130 billion by 2030, and seek out “attractive returns from enabling emissions reduction and business transformation in high-emitting sectors,” the board said in a February 2022 news release.

In late 2024, the CPP still held 3.5 percent of the plan in fossil fuel production, roughly $22.6 billion, according to Shift, a group whose focus is on “action for pension wealth and planet health,” summarizing CPPIB public meetings in various Canadian cities around that period. The group said it had documented at least six new investments in fossil fuel assets by the CPPIB in 2024, including US$300 million in fracking expansion in Ohio, C$1 billion for pipeline expansion to increase Alberta’s fossil fuel production, and US$843 million in oil and gas pipelines in the U.S. Midwest.

The CPPIB said on its website that blanket divesting from sectors like oil and gas “can have unintended consequences, such as pushing activities to less transparent, private markets.” The board said it encourages companies to make progress on decarbonization and will sell an asset if it believes a company “is not appropriately managing material sustainability-related risks.”

While the CPPIB has moved away from its net-zero promise, it has continued to make investments in electric vehicles. It has more than quadrupled its holding of Tesla stock in the last year, increasing its holdings from 618,000 to 2.9 million shares. It had $1.07 billion in the company’s stock as of March 31.

The CPPIB’s announcement comes at a time when many corporations and banks have been divesting from net-zero initiatives.

Four of Canada’s largest banks announced in January they would leave the United Nations-backed Net-Zero Banking Alliance. The Bank of Montreal, TD Bank, National Bank of Canada, and the Canadian Imperial Bank of Commerce followed six other American banks in leaving the alliance ahead of the inauguration of U.S. President Donald Trump.

BlackRock, an investment company that manages US$11.5 trillion in assets, also withdrew from the Net Zero Asset Managers (NZAM) initiative in January. The NZAM is a volunteer coalition consisting of hundreds of signatories that manage more than US$57.5 trillion in assets. A BlackRock spokesperson told The Epoch Times that while the company’s membership in the initiative did not impact how it managed client portfolios, it did lead to confusion about the company’s practices and subjected it to legal inquiries from public officials.