REPORT: Ongoing Fossil Fuel Ties on Pension Boards Raise Conflict of Interest Concerns 

New analysis finds persistent governance risks in Canada’s largest public pension funds, where board ties to fossil fuel companies continue with minimal change – creating potential conflicts of interests that can undermine climate commitments and the retirement security of millions.

Shift: Action for Pension Wealth and Planet Health’s (Shift) June 2025 report, Entrenched Interests: Fossil Fuel Ties on Canada’s Pension Boards, reveals ongoing systemic governance risks within Canada’s largest public pension funds. Despite intensifying climate risks, growing expectations for pension boards to have expertise in climate risk, and public commitments to decarbonization, the deep entanglement between pension fund boards and fossil fuel companies remains largely unchanged.

This report builds on our 2022 publication, Canada’s Climate-Conflicted Pension Managers. This 2025 update reveals how the fossil fuel industry could exert influence over the boards managing the retirement savings of millions of Canadians.

Analyzing the boards of Canada’s 11 largest public pension funds – which collectively manage more than $2.5 trillion in assets on behalf of 27 million Canadians – the report finds that fossil fuel entanglements persist on Canadian pension boards. 

As of June 1, 2025, five major pension funds – the Canada Pension Plan Investment Board (CPPIB), Ontario Teachers’ Pension Plan (OTPP), Public Sector Pension Investment Board (PSP), Alberta Investment Management Corporation (AIMCo) and Ontario Municipal Employees Retirement System (OMERS) – continue to have directors on their boards who hold directorships in fossil fuel companies. 

In total, nine current board members across these funds sit on the boards or executive teams of 12 fossil fuel companies or fossil-focused investment firms. These overlapping roles raise serious concerns about whether those directors can act in the best interests of pension beneficiaries to protect the financial security of millions of Canadians, when the same directors have a legal obligation to maximize profits for fossil fuel corporate shareholders.

Spotlight on Governance: Four Illustrative Profiles

These board-level overlaps are explored in detail through four Governance Profiles, which  illustrate how fossil fuel affiliations have the potential to distort accountability, weaken climate oversight, and threaten long-term fund sustainability: 

  • Canada Pension Plan’s Net-Zero Reversal: Three members of Canada Pension Plan’s current 10-person board – representing 30% of the board – held fossil fuel roles when CPPIB abandoned its net-zero by 2050 commitment in May 2025, raising serious concerns about the potential for conflicts of interest.

  • Pension Directors and Fossil Fuel Lobbying: Directors from AIMCo, PSP, OMERS, and OTPP sit on the boards of oil and gas companies that participated in a coordinated industry campaign to pressure the federal government to weaken or reverse key climate policies.

  • Environmental Harm and Conflicted Leadership: Directors at OTPP and PSP hold directorships in fossil fuel companies responsible for oil sands tailing spills, pipeline leaks, and other regulatory breaches, raising serious concerns about their ability to uphold their fiduciary duties and undertake credible oversight of climate risks.

  • Political Interference at AIMCo: In a rare and sweeping move, the Alberta government dismissed AIMCo’s entire board. One-third of AIMCo’s newly appointed directors now have ties to oil and gas interests, potentially jeopardizing the fund’s independence and exposing beneficiaries to increased climate-related financial risks.

Why This Matters: Climate Risk, Fiduciary Responsibilities and the Governance Gap

As global temperatures soar – reaching more than 1.5°C above pre-industrial levels in 2024 – Canada is already grappling with the escalating toll of climate change: record-breaking wildfires, floods and infrastructure damage. Climate disasters caused $8.5 billion in insured economic losses in Canada in 2024 alone. Yet many of our largest pension boards remain entangled with the very industries fueling the crisis: oil, gas and pipelines. 

Climate change is no longer a distant environmental issue – it's a defining financial risk. Pension fund directors have a fiduciary duty to act in the long-term best interests of their beneficiaries.  But fossil fuel entanglements could erode that duty, raising urgent governance questions:

  • Can pension fund directors credibly oversee climate risk while holding fossil fuel directorships?

  • Are pension funds disclosing and managing real or perceived conflicts of interest transparently?

  • Do pension boards and the sponsors appointing them have the climate literacy to recognize how fossil affiliations may distort decision-making?

Despite Canada’s climate commitments and the growing financial toll of climate impacts, unresolved concerns around climate literacy and conflicts of interest on pension fund boards remain a significant barrier to credible climate risk governance. As climate impacts worsen and economic losses grow, Canada’s pension-climate governance gap is growing too wide to ignore.

Image of five Canadian pension funds with fossil fuel entanglements on their board of directors

From Conflict to Credibility: Governance Reforms Needed

To protect pension members and ensure credible climate stewardship, this report calls for governance reforms across Canada’s public pension funds:

  • Stronger governance standards to prevent real or perceived conflicts of interest.

  • Full transparency around director affiliations and climate-related decision-making.

  • Clear fiduciary guidelines aligning board responsibilities with climate science and domestic and internationals net-zero commitments.

Boards must be accountable to the people whose retirements they protect – not to fossil fuel companies.

“Pension boards face difficult governance decisions to reduce the climate impact of their investments and reduce fund exposure to risky stranded assets in the fossil fuel sector. Climate-related board decisions from funds managing hundreds of billions in assets have major implications for fossil fuel companies. It’s easy to see how fossil fuel company directors could potentially find themselves with real or perceived conflicts, and how such conflicts, if not addressed, could undermine prudent pension governance.”

Adam Scott, Executive Director
Shift: Action for Pension Wealth & Planet Health
“It’s deeply concerning that pension directors overseeing the retirement savings of 343,000 Ontario teachers have a financial interest in companies pushing to build new pipelines and LNG terminals, expand the production of fracked gas, and dismantle key climate policies. It’s no wonder that OTPP refuses to stop investing in oil, gas and pipelines when these are the people on my pension’s board.”

Kathy Mason, OTPP member
Retired school librarian in Oakville, Ontario

For interview requests, questions or comments, please contact info@shiftaction.ca.

“I was disappointed to learn that three out of the 10 directors of the Canada Pension Plan have ties to fossil fuel companies. I can’t help but wonder if these fossil fuel interests influenced CPPIB’s decision to abandon net-zero by 2050 and continue investing billions in oil and gas expansion.”

Marcus Taylor, Canada Pension Plan contributor
Professor in the Department of Global Development Studies at Queen’s University and a contributing author to the Intergovernmental Panel on Climate Change