Statement on Ontario Teachers’ flawed 2026-2030 climate strategy

Shift StatementOntario Teachers' Pension Plan
Written By Shift Action

February 20, 2026: Statement revised to clarify concerns applied to OTPP’s “Transition Planning” criteria, not those covered under “Climate Solutions.”

Toronto, ON | Traditional territories of the Wendat, Anishnaabeg, Haudenosaunee, Chippewas, and Mississaugas of the Credit First Nation

OTPP’s Climate Transition Aligned Framework: 2026-2030 Climate Strategy has the fund moving in a smart and strategic direction to focus on real-world decarbonization. But OTPP’s strategy has major blind spots which, if not corrected quickly, could lead to serious consequences for the financial sustainability of the OTPP portfolio and the climate that Ontario teachers retire into.  

At first glance, OTPP appears to be following La Caisse’s lead, shifting from a focus on portfolio decarbonization towards a strategy aimed at decarbonizing the real economy by encouraging companies to adopt credible transition plans.    

Such approaches can be logical, as climate transition planning is a complex process that takes time and capital to achieve. Measuring emissions intensity alone doesn’t capture the whole-economy perspective needed to manage climate-related risks and opportunities. For long-term investors, investing in companies making the transition to zero emissions can generate financial returns, increase value, reduce risks and contribute to stabilizing our shared climate. But not all companies have credible or profitable transition pathways – including OTPP’s privately-owned fossil fuel companies – and OTPP’s climate strategy fails to acknowledge this. 

As always, the devil is in the details, and the details of OTPP’s strategy are both short-sighted and incomplete. The climate strategy:

  • Needlessly waters down OTPP’s net-zero commitment. There is no legal or technical justification for this change. OTPP makes a major error by removing its net-zero by 2050 portfolio target and replacing it with a vague commitment to “taking an active role in supporting the global goal to achieve net-zero emissions by 2050” that is neither credible nor accountable. 

  • Strips out all previous climate targets for the OTPP portfolio. OTPP now has no targets to reduce absolute emissions or emissions intensity across its total portfolio. Its previous commitment to have 90% of portfolio emissions covered by science-based transition plans by 2030 has also been removed.

  • Lacks required ambition and ignores the majority of OTPP’s portfolio. Assuming that OTPP’s average ten-year rate of return continues, OTPP’s projected portfolio value in 2030 would be around $400 billion. But OTPP’s target is to reach just $70 billion in private "Climate Aligned Transition” assets by 2030, which Shift estimates could leave nearly three-quarters of the portfolio lacking any clear or accountable climate objectives. 

  • Lacks adequate criteria and guardrails. OTPP’s stated criteria for including assets in its $70 billion target, in particular for the “Advancing Tier” under “Transition Planning”, are not adequate measures of whether or not a company has a profitable or credible long-term transition pathway. In contrast, La Caisse applies the full Climate Bonds Initiative (CBI) Technical Screening Criteria in its Transition Financing Framework, which has guidance for specific sectors, excludes fossil fuel producers and also requires additional decarbonization plans for heavy emitters privately owned by La Caisse. Shift questions why CBI would grant an endorsement of the OTPP framework, when the details released do not appear to fully align with either CBI’s Green or Transition framework guidance.

These issues represent deep flaws in OTPP’s climate strategy, which undermine many of the positive and credible signs of progress in OTPP’s approach. With what has been disclosed so far, Shift is concerned that OTPP will not adequately manage the fund’s exposure to climate-related financial risks. 

Experts have warned that if global temperatures are not stabilized as quickly as possible, pension fund portfolios are projected to face catastrophic losses. In a world of climate breakdown, pension funds cannot act only as market-takers. Their mandates require them to manage the long-term systemic risks of the climate crisis, taking an active approach to driving and shaping the global energy transition – for the sustainability of their portfolios and the long-term benefit of their members. 

With its weakened net-zero objective, OTPP appears to be the latest Canadian pension acting on bad legal advice from Bay Street lawyers. Since the anti-greenwashing provisions of Bill C-59 became law, the boardrooms of Canadian corporations and financial institutions have been flooded with corporate lawyers advising them to slash climate commitments and disclosures. This is a dangerous governance misdirection. Warnings of the legal risks for pension managers from greenwashing complaints to Canada’s Competition Bureau have been wildly overblown, while actions to retreat from the credible, accountable commitments required to adequately manage climate risks put pension funds offside with their core fiduciary obligations. Meanwhile the Canada Pension Plan Investment Board (CPPIB) is facing a serious legal challenge over its failure to adequately manage climate risk, less than a year after it abandoned its net-zero commitment.

“As the chair of the Intergovernmental Panel on Climate Change said last week, net-zero isn’t a political choice, but the only option available to face the unrelenting physical reality of climate change,” says Adam Scott, Executive Director of Shift. “The leadership of major pension funds like Ontario Teachers’ needs to question if they fully understand the gravity of the climate crisis for their institutions and their members”.

More information:

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. Shift is a project of MakeWay Canada.

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