CPPIB governance lapses exemplified by deficient approach to climate change
Something is rotten at the Canada Pension Plan Investment Board (CPPIB). A recent spate of investment controversies, mediocre financial performance, and apparent lapses in governance and disclosure have drawn criticism from disparate voices.
Perhaps most consequential for the retirement security of its 22 million members is CPPIB’s deficient approach to climate change – which CPPIB acknowledged is “the single biggest source of risk for the fund”. That’s why four young Canadians are taking the investment manager for the $793-billion Canada Pension Plan (CPP) to court, claiming it’s breaching its duty to invest in their best interests by mismanaging climate risks.
In 2026 alone, CPPIB has faced criticism for investing in companies closely tied to the Trump administration, pouring $16 billion into American contractors linked to Immigration and Customs Enforcement’s mass violation of human rights, and financing Elon Musk’s gas-fired data centre that’s spewed unpermitted pollution and produced sexualized deepfakes of women and children.
Amidst this dubious “approach to sustainability”, CPPIB unilaterally and retroactively changed its benchmark to sanitize its financial underperformance and increase executive compensation. The pension manager is regularly criticized for failing to beat the market, despite its increasingly bloated personnel costs, operating expenses and management fees.
CPPIB has a duty to invest in Canadians’ best interests, ensuring that both an 18-year-old and a 98-year-old can collect their CPP cheques after retiring. But as climate change worsens, Canadians who won’t retire for decades have reason to wonder if CPPIB is truly investing in their best interests.
CPPIB has no publicly-disclosed climate strategy, no net-zero emissions commitment, no targets to reduce portfolio emissions, no goals to invest more in profitable climate solutions, and no exclusions on financing the primary drivers of climate change – oil, gas, coal and pipelines.
CPPIB made at least $6 billion in new investments in fossil fuels in 2025 alone, including gas plants, LNG terminals, pipelines and oil and gas producers. Its CEO regularly makes public statements re-affirming its “steadfast” support for the fossil fuel industry, denying the energy transition and telling Bay Street that CPPIB “likes oil and gas pipelines.”
CPPIB’s latest annual report includes just six pages of climate risk disclosures. It repeats the suspect claim that the CPP would lose just 4% of its value in a “hothouse world” of 3℃ of global warming – which climate scientists and economists say would be like experiencing the “Great Depression forever”.
CPPIB’s board doesn’t appear to grasp the scale, severity and urgency of climate risks, and is failing to hold the pension manager accountable for managing them. None of CPPIB’s directors appear to have expertise or experience in managing climate risk. It’s not even listed as a skill in the board’s composition matrix. Instead, three CPPIB directors simultaneously sit on the boards of fossil fuel companies that are increasing fossil fuel production, selling gasoline, building gas plants and lobbying to dismantle climate policy.
Federal and provincial finance ministers, and parliament more broadly, don’t seem to care. They appointed these CPPIB board members, including just this week a director of one of Canada’s largest oil and gas producers. A spokesperson for Finance Minister Champagne recently said it’s up to CPPIB to decide how it invests and up to its independent board to “oversee risk management and investment policies”.
Taken together, the investment controversies, governance lapses and flawed climate approach suggest that something is amiss at CPPIB. Our national pension manager seems to have forgotten what’s in the best long-term interests of Canadians, and keeps investing in companies and assets that are putting our pensions and our planet at risk.
The four young Canadians taking CPPIB to court have had enough. As one of those CPP contributors says, “If CPP Investments won’t step up and do the right thing when it comes to accounting for climate risks and protecting our financial contributions and benefits, then it’s the court’s duty to step in. My financial future is on the line.”