The Canada Pension Plan is undermining its own sustainability by investing in climate failure
In an op-ed published in Corporate Knights, Shift’s Campaign Specialist Cheryl Randall and Senior Manager Patrick DeRochie write that when four young Canadians challenged the Canada Pension Plan Investment Board (CPPIB) in court over climate risk, they weren’t just suing a pension fund – they were demanding that one of the world’s largest investors confront the climate crisis seriously. Their case alleges that CPPIB is mismanaging billions in fossil fuel investments while underestimating the catastrophic financial risks of a warming planet, putting the retirement security of millions at stake. With the fund’s 2025 reversal on net-zero commitments and a board heavily tied to fossil fuel companies, the lawsuit raises urgent questions about whether Canadians can truly rely on their pensions in a hotter, more unstable world. This fight isn’t about money – it’s about ensuring that our savings, and our future, survive the climate emergency:
When four young Canadians took the Canada Pension Plan Investment Board (CPPIB) to court in October, the pension manager responded by calling the legal challenge “an action against the retirement security of 22 million Canadians.” This response deflects from an obvious truth: climate stability is a prerequisite for the financial sustainability of the Canada Pension Plan.
The four plaintiffs allege that the CPPIB has breached its duties by mismanaging climate-related financial risks. Their case argues that the pension manager is dramatically underestimating its exposure to the financial risks of a warming planet. In its 2025 annual report, the investment board estimates only a 4% loss in a “hot-house world” scenario where temperatures rise by 3°C. But scientists warn that such a trajectory would bring devastating impacts to global economies, financial systems and human livelihoods. No portfolio could withstand the impacts of that much warming. Yet CPPIB has continued to commit billions to the cause of the crisis: fossil fuel expansion.
“Our case is alleging that CPP Investments is mismanaging our pension fund by failing to adequately respond to climate change,” explains Rav Singh, one of the young applicants. “CPP is supposed to be one of our most reliable sources of retirement income. We should all be concerned that our CPP benefits may not be as dependable as we’d like to think.”
Meanwhile, last year CPPIB abandoned its net-zero commitment, reversing its 2022 statement that stewarding the portfolio to net-zero emissions was in “the best interests of the contributors and beneficiaries of the Canada Pension Plan.” The net-zero reversal was approved by a board on which nearly one-third of CPPIB directors held roles with fossil fuel companies, raising questions about potential conflicts of interest.
CPPIB is one of the world’s largest and most sophisticated investors. It has the tools, talent and resources to manage climate risk responsibly – but it must choose to actually do so. Protecting the CPP means protecting the climate that Canadians will retire into. Climate stability and pension sustainability are not opposing goals. They are inseparable.