CPPIB Watch: A quarterly update on CPPIB-owned fossil fuel companies (April – June 2025)
Shift’s latest deep dive into the incompatibility of CPPIB’s fossil fuel investments and its climate obligations
CPPIB abandons commitment to net-zero by 2050
On May 21, the news broke that the Canada Pension Plan Investment Board (CPPIB) had quietly abandoned its commitment to net-zero emissions by 2050.
In 2022, CPPIB had pledged to align the Canada Pension Plan (CPP) portfolio with net-zero by 2050. CPPIB has now walked away from that promise, and didn’t even include this significant update in its 2025 Annual Report. Shift had to dig deep into an obscure FAQ section on CPPIB’s Approach to Sustainability webpage to find the news.
This is an unacceptable abdication of responsibility from the people responsible for managing the collective retirement savings of more than 22 million Canadians.
CPPIB’s net-zero commitment was never credible anyway
But CPPIB’s abandonment of its net-zero commitment should perhaps come as no surprise– because it was never credible anyway.
For years, Shift has meticulously documented how the actions and investment decisions of CPPIB and its privately-owned fossil fuel companies are expanding and prolonging the use of oil and gas, building new fossil fuel infrastructure, attempting to block and delay government climate policy, misconstruing the role of fossil fuels in the energy transition, greenwashing their operations, and gambling the CPP on investments that assume the failure of global efforts to limit global heating to safe levels.
In retrospect, the writing was on the wall for CPPIB’s abandonment of its net-zero commitment.
In March, oil and gas media outlet Hart Energy reported that CPPIB wants to grow its investments in oil and gas by $12.5 billion in the coming years. Speaking at CERAWeek, one of the world's largest oil and gas conferences held in Houston in March, Bill Rogers, CPPIB's Head of “Sustainable Energies”, said that CPPIB is "quite unusual" and that "we are absolutely going to keep investing in traditional energy." Rogers claimed that "quite a few pension funds have an inability to invest in traditional energy because of the carbon content and they've also locked into net-zero pathways that mean they need to divest."
Rogers went on to say that continuing to invest in oil and gas is necessary to maximize returns and reduce the risk of losses, and asserted, without evidence, that oil and gas companies "are fundamental in achieving an energy transition. So what we want to be doing is providing capital to support their activities.”
According to Hart Energy's reporting, Rogers pointed to CPPIB's acquisition of a stake in California Resources Corporation, California's largest oil and gas producer. “That's a transaction that many of our (pension fund) brethren couldn't do because of their (net-zero) mandate restrictions,” said Rogers. He went on to say that, "We're in a growing market. There's going to be a need for more energy, so let's continue to build out low-cost energy as (we keep an) eye on the sustainability side as possible. I think you keep doing that, over time you should be alright.”
“Business as usual” while Canada burns
Now, an early wildfire season, made five times more likely due to climate change, is forcing the evacuation of entire northern communities and making thousands of Canadians flee their homes. But for CPPIB CEO John Graham, it’s “business as usual” for our national pension manager. Graham said that CPPIB’s abandonment of net-zero means that “nothing’s changed on what we’re actually doing (to incorporate climate and sustainability into the portfolio).” He went on to say that CPPIB is “really keen on pipelines, we’re really keen on conventional energy, oil and gas, renewables,” adding that the CPPIB team is “happy to look” at buying the Trans Mountain Expansion pipeline— which is designed to transport 890,000 barrels of oil per day into the 2070s.
As the climate crisis accelerates, CPPIB’s commitment to “business as usual” is alarming. In its 2025 Annual Report (p.68), CPPIB’s climate change scenario analysis finds that the CPP would lose less value in a “hot house world” that assumes 3℃ of global heating compared to a net-zero by 2050 scenario that assumes global warming is limited to 1.5℃ through stringent climate policies and technological innovation. CPPIB’s “hot house world” analysis reflects a business as usual scenario in which only currently implemented climate policies remain in place, leading to significantly higher global temperatures.
CPPIB’s apparent comfort with 3℃ of global heating is stunning, seeing that it would expose 3.25 billion people to lethal heat and humidity, decimate fresh water supplies and global food production, cause the extinction of most plants and animals, and likely lead to the collapse of marine ecosystems and catastrophic sea level rise. The fact that CPPIB thinks it would be able to fulfill its mandate amidst this level of climate breakdown suggests an alarming failure to appreciate what life could look like for Canadians set to retire in the coming decades if we fail to rapidly reduce global greenhouse gas emissions. This level of climate breakdown could make it impossible for CPPIB to protect the collective retirement savings of 22 million Canadians from undue risk of loss.
What have CPPIB-owned fossil fuel companies been up to this spring?
CPPIB’s apparent satisfaction with “business as usual” and its abandonment of net-zero emissions seems to suit the fossil fuel industry just fine. Here’s what some of CPPIB’s privately-owned fossil fuel companies have been up to in recent months:
Divesting from Encino: After committing another US$300 million to the fracking company last year, CPPIB announced it will divest Encino Energy, a company that’s ramping up oil and gas production, funding greenwashing groups and causing earthquakes in Ohio.
Trouble at Tallgrass Energy: CPPIB-owned Tallgrass Energy is building a new pipeline to expand the transportation of Texan fracked gas to new markets, and misled a Native American tribe about a hydrogen pipeline.
California Resources Corporation Lobbying: California Resources Corporation, an oil and gas producer partially owned by CPPIB, and its industry lobby groups are trying to block California’s stringent climate risk disclosure rules, contradicting CPPIB’s support for stronger sustainability disclosure standards. Some time this spring, CPPIB also appears to have quietly removed a webpage featuring a Harvard case study about CPPIB’s net-zero commitment and its 2023 decision to buy a 49% stake in CRC subsidiary Aera Energy.
Carbon Capture & Storage Fallout: Calpine, a gas plant operator partly owned by CPPIB, partnered with ExxonMobil on a dubious carbon capture and storage (CCS) project while praising President Trump’s energy policies. A month later, the Trump administration axed funding for the CCS project. In January, CPPIB announced it is selling its stake in Calpine, subject to various state and regulatory approvals.
U.S. Pension Divests from CPPIB-Backed Oil: The New York state pension fund applied an investment restriction on Civitas Resources, an oil and gas producer in which CPPIB has invested US$5.5 billion.
Read on for the full details.
CPPIB announces divestment of fracking company that’s ramping up oil production, funding greenwashing groups, and causing earthquakes in Ohio
Encino Acquisition Partners, part of CPPIB’s “Sustainable Energies” portfolio, is 98% owned by CPPIB. A CPPIB managing director sits on Encino’s board. On Earth Day 2024, Encino Energy announced a US$300 million commitment from CPPIB in the company’s "accelerated development of the Utica oil play.”
Amidst a worsening climate crisis, CPPIB-owned Encino Energy is ramping up production and funding a greenwashing group to advocate for oil and gas expansion in Ohio. In its "Essential Facts on Essential Ohio Energy" report, the Ohio Natural Energy Institute touts the state's record oil and gas production in 2023, celebrating a 35% increase from the previous year. The report notes that CPPIB-owned Encino Energy produced nearly half of the state's oil in 2023.
The Ohio Natural Energy Institute is funded by the state's oil and gas producers, including Encino, and claims to "educate people about the essential energy that makes life better, specifically focusing on natural gas and oil production." There is no mention of climate change, or the role of fossil fuels in global heating, on the institute's website.
Encino is planning to frack underneath protected wildlife areas in Ohio. In March, state officials selected Encino to frack for oil and gas beneath a protected wildlife area in the Buckeye State. “Gov. Mike DeWine and state legislators risk good health, our pristine lands, our water and air and livable planet by continuing to support this dangerous and polluting 20th century energy industry in our quickly warming 21st century,” said Melinda Zemper with Save Ohio Parks. “Our parks, our children, our grandchildren’s lives are at stake here, and you’re about to just say that doesn’t matter,” said Roxanne Groff, also with Save Ohio Parks.
Encino’s oil and gas extraction have become so pervasive in Ohio that the company is causing earthquakes, according to the Ohio Department of Natural Resources (ODNR). In May, state regulators ordered Encino to indefinitely halt fracking operations at a well pad in Ohio's Noble County following a recent string of earthquakes in the area. "There has been some recent earthquake activity in Noble County due to oil and gas operations, specifically hydraulic fracturing operations by Energy Acquisition Partners (EAP) operating as Encino Energy," said Karina Cheung, a spokesperson for the ODNR. "Hydraulic fracturing operations have been halted on the well pad."
According to Mike Brudzinski, a professor of seismology at Miami University, fracking – the spraying of a mixture of water, sand and chemicals at high pressure, deep underground, to free fossil gas from shale, along with the injection of that wastewater underground as a disposal method– can cause earthquakes. Brudzinski credited ODNR for swiftly intervening to halt Encino’s operations.
Photo: Earthquakes have sharply increased in 2025 in Ohio’s Noble County due to fracking activity (Ohio Department of Natural Resources, published in Signal Cleveland).
Later in May, CPPIB announced the sale of its entire 98% ownership stake in Encino Acquisition Partners. CPPIB has owned Encino since 2017, when our national pension manager “envisioned creating a company that would be a leader in acquiring U.S. oil and gas assets.” Encino’s new owner, EOG Resources, bragged that its acquisition represents “more than two billion barrels of oil equivalent per day.” The transaction is expected to close in the second half of 2025, subject to customary closing conditions and regulatory approvals.
In response to questions from Pensions & Investments about CPPIB’s sale of Encino, Shift’s Senior Manager Patrick DeRochie said:
“Canadians should be relieved that CPPIB has finally determined that it's risky and irresponsible to invest their national retirement savings in an American oil and gas producer that's ramping up production, funding front groups for the oil and gas industry, lobbying the Trump administration to dismantle federal climate regulations, drilling underneath state parks and protected wildlife areas, and causing earthquakes in Ohio.”
The following week, €500-billion German asset manager Union Investment divested its shares in EOG, saying that following “intensive, and at times difficult, dialogues,” it could not identify a sufficient commitment to the required climate targets. “As part of our climate strategy, we require all companies to commit to long-term, comprehensive climate targets,” said Union’s head of sustainability Henrik Pontzen. “If a company fails to even set such targets, we see no basis to assume it will achieve them.”
Union Investment seems to have a much more credible standard for net-zero alignment than CPPIB, Encino and EOG. With CPPIB having invested US$300 million in Encino just over a year ago, Canadians should know that the CPP will have facilitated the expansion of fracking in Ohio for years to come. The fact that CPPIB's Head of “Sustainable Energies” is “pleased with Encino's success” illustrates just how mis-aligned CPPIB's climate strategy is with safe emissions pathways.
CPPIB-owned Tallgrass Energy to build new gas pipeline to transport Texan fracked gas, misleads Native American tribe about hydrogen pipeline
CPPIB invested $1.2 billion in Tallgrass Energy in August 2024 and owns an estimated 24.5% stake in the pipeline company, which operates 16,000 km of oil and gas pipelines and storage terminals across 14 U.S. states. A managing director in CPPIB's "Sustainable Energies" group sits on the board of Tallgrass Energy.
In May, Tallgrass Energy announced it’s planning to build a new pipeline that would lock in the use of Texan fossil gas for decades to come, with a targeted in-service date of late 2028. The pipeline is proposed to transport up to 2.4 billion cubic feet of gas from multiple points in Texas' Permian Basin to Tallgrass' Rockies Express Pipeline and onward to major U.S. markets. A gas analyst from S&P Global said that the proposed pipeline would enable Tallgrass to transport growing Permian gas production and give Tallgrass access to markets in the western U.S. to compete with Canadian gas.
Tallgrass falsely claims that the gas to be shipped by its new pipeline is "clean energy"-- even though fossil gas is mainly composed of methane that is fueling dangerous climate change. Tallgrass also claims that the new pipeline will help enable gas-fired power plant operators and industrial gas consumers to "decarbonize through CO2-capture and sequestration and the use of clean hydrogen." Tallgrass does not explain what building a new gas pipeline has to do with "decarbonization".
Tallgrass is also being accused of misleading a Native American tribe about its plans to build a gas pipeline through its land. The company previously told the Navajo Nation it was building a green hydrogen pipeline connecting New Mexico and Arizona, when in reality the proposed pipeline will transport fossil gas.
The pipeline is part of a much larger project proposal that would allegedly create a hydrogen economy centred in New Mexico, including hydrogen production, carbon storage, repurposing a mothballed coal-fired power plant as a hydrogen-fired power plant, and pipelines connecting the various parts. Earlier this year, Tallgrass suddenly decided to change what would be transported in the pipeline from hydrogen to fossil gas.
The news surprised and angered many, including the Navajo Nation, who say the change to the proposed pipeline from hydrogen to fossil gas should require the entire consultation and regulatory process to be restarted. "People freaked out," said Jessica Keetso (Diné), an outreach coordinator for the Native American group Tó Nizhóní Ání, or Sacred Water Speaks.
Joe Romm, a senior research fellow at the University of Pennsylvania’s Penn Center for Science, Sustainability and the Media and a former acting assistant secretary for energy efficiency and renewable energy at the U.S. Department of Energy, is doubtful about Tallgrass’ proposed hydrogen project’s overall prospects. “In the real world, you don’t see [projects] like this happen a lot, something so complicated,” he said. Big hydrogen projects are the result of “powerful backers. And the most powerful is the oil and gas industry.” With all of the complications inherent in hydrogen production and transport, Romm said, “Just pipe the natural gas.”
When CPPIB announced its $1.2 billion commitment to Tallgrass Energy in August 2024, CPPIB highlighted the development of CO2 and hydrogen assets as examples of "initiatives aligned with the global transition to a lower-carbon future." Shift highlighted Tallgrass Energy's dubious hydrogen and CCS plans in our January 2025 report, Gaslighting the Energy Transition. The report found that Tallgrass’ hydrogen investments are unlikely to be viable under credible net-zero pathways. Its gas infrastructure, however, remains a core part of its business, creating significant risks for its investors and owners.
CPPIB-owned California Resources Corporation contradicts CPPIB’s support for climate risk disclosure. CPPIB then removes webpage featuring Harvard case study about CRC’s net-zero commitment
CPPIB was the 49% owner of Aera Energy until summer 2024, when Aera merged with California Resources Corporation (CRC) to become California’s largest oil producer. CPPIB now holds an 11.2% stake in the combined oil and gas company. A managing director from CPPIB’s “Sustainable Energies” group sits on CRC’s board.
CPPIB-owned California Resources Corporation and its industry lobby groups are trying to block California's stronger climate risk disclosure rules. This directly contradicts CPPIB's own position in support of climate risk disclosure, underscoring the fundamental conflict between the best interests of CPP members and the financial interests of the oil and gas industry.
In March, the Western States Petroleum Association (WSPA) wrote to California regulators to oppose the state's climate disclosure legislation and advocate for a narrow definition of companies to be included in the law's scope. The WSPA also supported a California Chamber of Commerce lawsuit that attempts to have the climate risk disclosure legislation declared unconstitutional. The WSPA is the industry association for oil and gas companies in Arizona, California, Nevada, Oregon and Washington. It includes CRC among its members.
Opposing California's climate risk disclosure law contradicts CPPIB's own policies. CPPIB's Proxy Voting Principles and Guidelines state that it supports international standards for climate risk disclosure. CPPIB also bragged in 2024 and 2025 about the number of companies that it engaged to improve climate-related disclosure. CPPIB's Chief Sustainability Officer even published an op-ed in the Financial Times last year in which he called for stronger climate risk disclosure standards, calling them "an act of enlightened self-interest" that are "as relevant to company success as they are to investors." He also criticized boards of directors "that stand back and allow industry associations to undermine this critical disclosure framework by arguing for extended reliefs or carve-outs."
Apparently CPPIB's policies and standards don't apply to CRC and its industry associations. It's bizarre and hypocritical to see a CPPIB portfolio company contradicting the pension manager's public support for stringent climate risk disclosure standards.
Somebody at CPPIB must have noticed this contradiction. Some time in spring 2025, CPPIB appears to have quietly removed a webpage featuring a Harvard Business Review (HBR) case study about its net zero commitment, originally posted on May 16th, 2024. The HBR paper included a case study about CPPIB’s decision to purchase Aera Energy, now a subsidiary of CRC. Using Wayback Machine, Shift has retrieved a version of the CPP Investments Insights Institute webpage captured on February 16, 2025. A full version of the HBR study can still be found on the Harvard Business Publishing website.
The case study highlights the factors that led to CPPIB’s decision to commit to net zero and the actions it’s taking to make it happen, with CPPIB’s Chief Sustainability Officer saying “We believed the time was right for CPP Investments to commit to stewarding the portfolio to net zero, in the best interests of its contributors and beneficiaries and in line with its mandate.” The case study offers insight into CPPIB’s decision not to set interim emissions reduction targets and suggests that some of CPPIB’s stakeholders and employees are uncomfortable with the pension manager’s approach to fossil fuel assets and climate risks. The study also includes a discussion of CPPIB’s decision to purchase a 49% stake in Aera Energy in 2023. At the time, staff in the “Sustainable Energies” team raised concerns about the investment’s alignment with CPPIB’s net-zero commitment, the profitability of Aera’s transition strategy, and the company’s ability to generate enough cash flow to fulfil asset retirement obligations, including well abandonment and reclamation.
It is peculiar that CPPIB decided to remove this case study, as CPPIB CEO John Graham said in May 2024 that “A company’s ability to navigate the transition to net zero can have an enormous impact on its future value.”
CPPIB-owned Calpine partners with ExxonMobil on CCS project, praises President Trump’s energy policy. Trump administration later axes funding for the CCS project
Calpine is currently 15.75% owned by CPPIB and part of its “Sustainable Energies” portfolio. A CPPIB managing director sits on Calpine’s board. In January, CPPIB announced it is selling its stake in Calpine, subject to various state and regulatory approvals.
In April, Calpine, the largest producer of power from fossil gas in the U.S. announced an agreement to partner with ExxonMobil on a greenwashed carbon capture and storage project attached to the Baytown Energy Center, a Calpine-owned gas plant near Houston. ExxonMobil claims that some of the captured CO2 will be sequestered, but much of it will be used for enhanced oil recovery – to expand oil production. The American fossil fuel giants falsely refer to the power produced by the gas plant as "low-carbon electricity."
Calpine's Executive Vice President said that "we understand that the nation’s gas fleet will remain the backbone of the grid for decades to come" and says that "we’re grateful to the Trump administration for championing expanded energy and electricity production to power America’s economy."
Just over a month later, the U.S. Department of Energy suddenly announced it would cut funding to 24 energy projects. One of these projects was the Calpine-Exxon CCS project, which had previously received US$270 million in funding.
New York state pension restricts investment in oil and gas company backed by CPPIB
According to its Real Assets Investments webpage, CPPIB has invested US$5.5 billion in Civitas Resources. As of March 31, CPPIB was the second largest shareholder in Civitas, owning 10.29% of the company’s shares.
In April, the New York State Common Retirement Fund announced it divested US$31 million of its holdings in eight fossil fuel companies that it deems ill-prepared for the transition to a low-carbon economy. The investment exclusion extends to Civitas Resources, an oil and gas producer backed and financed by CPPIB that falsely claims to be “Colorado’s first carbon neutral oil and gas producer.”