Statement: CDPQ’s new climate strategy and transition financing framework
For Immediate Release: June 19, 2025
Toronto, ON | Traditional territories of the Wendat, Anishnaabeg, Haudenosaunee, Chippewas, and Mississaugas of the Credit First Nation
Today’s release of the Caisse de dépôt et placement du Québec’s (CDPQ) 2025-2030 Climate Strategy and Transition Financing Framework reveals a credible, comprehensive and clear-eyed plan to protect Quebec pensions by achieving net-zero by 2050 and investing in a safe climate future. It affirms that CDPQ’s leadership understands that climate-safe investing is imperative for achieving the fund’s core mandate. The strategy further positions CDPQ as a global climate leader among institutional investors and exposes yawning shortcomings in the climate strategies of many other Canadian pension managers, particularly the Canada Pension Plan Investment Board (or CPPIB).
Achieving climate safety and long-term pension returns requires funds to use their significant market power and capital to decarbonize the real economy. Not all companies and sectors have credible transition pathways, so transparent guardrails-- such as CDPQ’s Transition Financing Framework-- are also required. With this plan, CDPQ has provided a clear and credible pathway for public pension funds to invest in the best long-term interests of plan members.
As with all climate investment strategies, the devil is in the details. With this plan, the initial details look good. CDPQ has been transparent in providing clear guardrails:
Uses respected international frameworks to guide investment practice;
Recognizes the urgent need to replace fossil fuels and avoid carbon lock-in;
Sets clear limits on the use of carbon offsets in achieving targets;
Follows a “Do No Significant Harm” principle;
Accounts for all emissions, including scope 3;
Links compensation for staff to climate targets;
Recognizes the crucial importance of protecting biodiversity and fighting deforestation;
Integrates the principles of just transition;
Acknowledges the need for government policies and regulations that guide the energy transition and mobilize capital for transition projects.
The striking difference between CDPQ and CPPIB
The contrast between CDPQ’s credible and confident approach to tackling the difficult challenge of decarbonization with that of CPPIB is striking. As Canada’s second largest and largest pension funds, respectively, both manage complex, diversified, global investment portfolios of a comparable size, with similar mandates to maximize risk-adjusted returns.
CPPIB was late to set any climate targets, slow to meaningfully change investment practices, eager to invest in new fossil fuel expansion, and quick to find an excuse to back away from its net-zero commitment.
CDPQ was the first Canadian pension fund to make science-based climate commitments, the first to tie staff compensation to achieving those commitments, the first to set climate solutions targets and the first to divest and exclude coal and oil investments. CDPQ is now the first to lay out how it's going to bring a substantial majority of its portfolio in line with net-zero within the next five years.
No need for greenwashing when your climate plan is credible
CDPQ’s renewed commitment to net-zero exposes bad-faith arguments from pension managers like CPPIB, who implied that Canada’s new anti-greenwashing provisions somehow prevent ambitious climate commitments. By linking its environmental claims to existing, credible internationally-recognized climate investment methodologies, CDPQ has confidently ratcheted up efforts to align its investment strategy with climate safety without worrying about running afoul of greenwashing rules.
In particular, CDPQ’s Transition Financing Framework names climate investment methodologies created by the Climate Bonds Initiative, Science Based Targets initiative, Net Zero Investment Framework and Transition Pathway Initiative (which is now being integrated into the International Sustainability Standards Board framework). CDPQ is also a founding member of the Net-Zero Asset Owner Alliance (NZAOA), which provides credible guidance and accountability for achieving net-zero targets.
CDPQ has offered an elegant example of how other pension funds can confidently proceed with climate strategies, secure in the knowledge that the strategies are credible and aligned with fiduciary duty. It’s another urgent reminder for pension managers who have failed to lay out a plan to rapidly align their portfolios with a safe climate while decarbonizing the real economy.
CDPQ’s updated climate strategy maintains CDPQ’s investment exclusion on coal and oil extraction and refining. It also identifies sectors that have viable, profitable decarbonization pathways, includes clear criteria for companies that are not aligned with net-zero by 2050, and incorporates a “Do No Significant Harm” principle that prevents investments from undermining climate mitigation, causing environmental or social harms, or locking-in high-emission activities. While CPPIB makes frequent statements and investments signalling that it will continue to prop up oil, gas, coal and pipelines, CDPQ clearly states that it will invest in climate solutions that replace fossil fuels.
CDPQ climate strategy silent on its significant fossil gas assets
Where CDPQ’s strategy falls short is its silence on natural gas, a fossil fuel that’s a major contributor to climate change. While CDPQ acknowledges International Energy Agency estimates that demand for natural gas could peak this decade, the Quebec pension manager’s climate strategy does not rule out investment in fossil gas and doesn’t address how this framework will apply to CDPQ’s existing fossil gas assets, which lack credible transition pathways.
For companies whose sole business is the production, processing, refining or transportation of fossil fuels, the only credible pathway to decarbonization is the phase-out of production or early retirement of assets. We will be watching to see how CDPQ will apply this new framework to limit its exposure and financing of risky, climate-polluting gas assets.
Background information:
Shift’s detailed analysis of CDPQ’s previous approach to climate risk and investments in fossil fuels (as of December 31, 2024)
Shift’s statement in reaction to CPPIB abandoning its net-zero commitment (May 21, 2025)
Contact information for interview requests:
Adam Scott, Executive Director, Shift Action for Pension Wealth & Planet Health
adamscott@shiftaction.ca
416-347-3858
Patrick DeRochie, Senior Manager, Shift Action for Pension Wealth & Planet Health
patrick@shiftaction.ca
416-576-2701
Shift Action for Pension Wealth and Planet Health is a charitable initiative that works to protect pensions and the climate by bringing together beneficiaries and their pension funds to engage on the climate crisis.
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