Statement: PSP leaves 900,000 federal employees with no climate strategy for their pension portfolio
Toronto, ON | Traditional territories of the Wendat, Anishnaabeg, Haudenosaunee, Chippewas, and Mississaugas of the Credit First Nation
After failing to achieve critical climate targets set in 2022, the Public Sector Pension Investment Board (PSP Investments, or PSP) has “closed” its five-year climate strategy. Canada’s third largest pension manager now has no publicly-disclosed strategy to protect its members’ retirement security from escalating climate-related financial risks.
With over $320 billion in assets, PSP manages the retirement savings of approximately 900,000 working and retired federal employees, including public servants, RCMP officers and Canadian Forces members who won’t retire for decades to come. In its 2026 Annual Report and climate-related financial disclosures, released this morning, PSP announced that its 2022-2026 climate strategy “came to an end” – with little to replace it.
Managing climate risks and achieving climate targets across a diversified global pension portfolio is challenging, and PSP has committed to introduce a new climate risk framework in fiscal 2027 as part of an “evolution in PSP Investments’ approach to sustainability.” Shift welcomes PSP’s commitment to continual learning and evolution – provided that learning and evolution actually leads to actions aligned with a safe climate.
But PSP has provided little evidence that its evolving approach meets the urgent, escalating, systemic risks of the climate crisis. Instead, PSP has tossed out a detailed taxonomy and a workable climate strategy backed by measurable decarbonization targets, and replaced it with a vague pilot framework that lacks clarity, stringency, transparency, accountability, and rigour.
Despite being mandated to invest in the best interests of federal employees, PSP now has no climate strategy, no net-zero commitment, and no climate-related targets to guide its investment and stewardship decisions. According to Shift’s analysis of the annual report, PSP held at least $10 billion in fossil fuel production assets as of March 31, 2026 – an increase since last year. The pension manager has no restrictions on new investments in oil, gas and coal – the primary drivers of climate change. Meanwhile, the chair of the PSP board’s Investment and Risk Committee concurrently serves as lead director of Imperial Oil, one of Canada’s largest oil companies.
PSP’s 2022-2026 Climate Strategy Roadmap and its accompanying Green Asset Taxonomy provided a detailed plan that started PSP on the path toward climate alignment. PSP achieved some climate-related targets over the course of the five-year strategy, including increasing investments in green and transition assets, committing 10% of long-term debt financing toward green bonds, and reducing portfolio emissions intensity by 20% below 2021 levels.
But PSP failed to achieve other climate targets – despite the pension manager’s insistence that it must remain an active owner of companies in order to support their decarbonization and management of climate risks. PSP fell $1 billion short of its 2022 target to halve its exposure to carbon-intensive assets by 2026 – despite acknowledging that such assets “may face increasingly strict regulatory requirements” in the medium term. PSP also missed targets to ensure assets representing 50% of its carbon footprint had science-based transition plans and to increase greenhouse gas data availability to 80% of its in-scope portfolio.
The consensus science is clear: to avoid dangerous climate change that threatens the financial sustainability of PSP’s portfolio and the retirement security of PSP’s members, fossil fuels must be rapidly phased out and the global economy must be rapidly decarbonized. PSP’s vague commitment to “transitioning to a more embedded approach to climate management” sounds like an abdication of responsibility at this crucial juncture when pension funds face political pressure to invest in fossil fuel expansion.
PSP’s “new climate risk framework” must quickly fill the void left behind by the closing of PSP’s 2022-2026 climate strategy. The retirement security of 900,000 federal employees depends on it.
For background information, see this detailed analysis of PSP in Shift’s 2025 Canadian Pension Climate Report Card.
For interview requests, contact:
Patrick DeRochie, Senior Manager, Shift
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.