CPPIB Watch: A quarterly update on CPPIB-owned fossil fuel companies (January – March 2026)
Shift’s latest deep dive into the incompatibility of CPPIB’s fossil fuel investments with the retirement security of Canadians
When it comes to managing the financial risks of climate change, there appears to be a glaring contradiction at the Canada Pension Plan Investment Board (CPPIB). On one hand, CPPIB executives have acknowledged that the climate crisis is an existential threat and critical investment risk for the fund. But on the other hand, many of CPPIB's investments, public statements and stewardship approaches do not add up to a credible response for managing such serious systemic risks. CPPIB's investment decisions continue to entrench, prolong, and expand the use of the fossil fuels driving the climate crisis – undermining Canadians’ retirement security in a livable future.
Climate contradictions in Calgary and Edmonton
At public meetings held in Alberta in February, CPPIB’s Senior Managing Director & Chief Public Affairs Officer Michel Leduc called climate change “the single biggest risk for a long-term horizon investor” and “absolutely the most significant challenge of our time.” Leduc also repeated the conflicting talking point that Canada’s Chief Actuary projects the Canada Pension Plan (CPP) to be financially sustainable until at least 2099 (a forecast which does not take systemic climate risks into account), adding that those projections matter little ”if the planet is not hospitable by that point.”
In the exact same meetings, Leduc highlighted CPPIB’s oil and gas assets in Alberta for the Calgary and Edmonton attendees, promoting CPPIB’s longstanding investments in Teine Energy, Wolf Midstream and Canadian Natural Resources Ltd. (CNRL). Many Albertans reported leaving the meeting feeling confused that the executive spokesperson for a $780-billion pension fund would call climate change “the single biggest source of risk for the (CPP) fund” just minutes after spotlighting investment in Canada’s largest oil and gas producer and second largest corporate carbon polluter. It’s an obvious contradiction.
In the week following those CPPIB meetings in Alberta, CNRL’s president announced record oil sands production (likely paired with record climate pollution) and told the company’s investors that it wants the federal government to scrap industrial carbon pricing and enable construction of a new crude oil pipeline to Canada’s west coast. This is entirely inconsistent with CPPIB’s claims of investing in “the whole economy transition.”
Doublespeak from downtown Toronto
CPPIB’s contradictory approach to climate change was also on display at the pension fund’s headquarters in downtown Toronto, where in February the CPP Investments Insights Institute posted an edited version of a panel discussion on pricing climate-related physical risks. During the discussion, CPPIB’s Chief Sustainability Officer Richard Manley stated the “certainty that physical risk was building in the economy… in a way where it was likely to land sooner, more frequently, and have greater impact than had previously been projected.” Manley went on to say that “we (should) stop positioning (climate change) as something that we can solve with a single actor solution”, calling climate change a “system level problem” that required action from governments, financial institutions and other market actors.
Manley is correct: climate change does require action from all societal actors, and no “single actor” is able to solve the climate crisis by itself. But CPPIB appears to use this fact as an excuse for inaction. CPPIB is not publicly calling for stronger climate policy, nor is it publicly calling on other financial institutions and actors to take ambitious action. Instead, the fund has backed out of accountable climate commitments, while continuing to invest billions in companies with business models reliant on prolonging and expanding the use of fossil fuels.
The week before the CPP Investments Insights Institute posted these remarks from Manley, CPPIB published its Third Quarter Fiscal 2026 results. The disclosures showed that CPPIB made at least $6 billion in new bets on fossil fuel assets in the 2025 calendar year. These new investments include $4.1 billion in Sempra Infrastructure, which is planning to build or expand three LNG terminals, and $1.4 billion in AlphaGen, which plans to fire up its gas plants to meet growing electricity demand from U.S. data centres.
CPPIB warns of worsening climate risks – and then invests to exacerbate those climate risks
CPPIB has no net-zero target, no emissions reduction targets, no climate solutions targets, and no publicly-disclosed climate strategy. CPPIB appears to be failing to adequately manage climate-related financial risks, subjecting pension contributions to undue risk of loss. That’s why four young Canadians are taking CPPIB to court.
No one expects CPPIB to provide a “single actor solution” to the climate crisis. Canadians do, however, expect an ambitious, credible and collaborative climate investment strategy. Shift doesn’t see any evidence that CPPIB has such a strategy in place. Instead, our national pension manager continues to privately own and oversee fossil fuel companies that are expanding and prolonging the use of oil and gas without any transition plan – making the climate crisis worse and increasing the CPP’s exposure to undue risk of loss.
This quarter’s CPPIB Watch shows how:
CPPIB waited until Christmas Eve to announce that it would spend up to US$1.05 billion to buy a stake in oil products company Castrol from BP.
CPPIB-owned Tallgrass Energy is building gas plants around the U.S. and met with President Trump to discuss how U.S. companies can exploit Venezuelan oil.
An oil storage tank in Saskatchewan operated by CPPIB-owned Teine Energy caught fire, while infrared cameras captured footage of unpermitted methane pollution at other Teine facilities.
Colorado’s energy regulator is requiring CPPIB-backed Civitas Resources to move drilling locations further from residential areas – which could force Civitas to leave US$83 million of oil and gas in the ground.
CPPIB’s investment in Caturus Energy’s Texas fracked gas production and Commonwealth LNG’s Gulf Coast export terminal is a risky bet on a delayed energy transition.
CPPIB-backed California Resources Corporation acquired another oil and gas producer and reported increased reserves and production, but still faces a “challenging near-term outlook.”
CPPIB-backed VoltaGrid is going big on gas-powered data centres, while its CEO finances the Senate primary campaign of an oil and gas lobbyist endorsed by President Trump.
Riddled by controversy, Elon Musk’s CPPIB-backed data centres are facing new litigation after building “one of the largest fossil fuel power plants in Mississippi”.
Newly under CPPIB ownership, Allete subsidiary Minnesota Power won’t let go of its gas plant expansion plans. The CEO of another Allete subsidiary, BNI Coal, wants to run for the state Republicans, citing “developing North Dakota’s energy resources” as a priority.
Read on for the full details.
CPPIB’s Christmas gift to Canadians: a US$1 billion stake in oil products company Castrol
On December 24th, 2025, CPPIB announced an agreement, alongside private equity firm Stonepeak, to invest up to US$1.05 billion in Castrol, calling it a “high-quality, global business at the heart of the energy and industrial economy” valued at US$10.1 billion. The transaction means CPPIB will take a small stake in the global manufacturer and marketer of engine oils, industrial fluids, and greases with approximately 20 blending plants, which will remain 35% owned by BP. The long-term value of this business is likely at risk from the energy transition.
CPPIB-owned Tallgrass Energy is building gas plants around the U.S. and met with President Trump to discuss exploitation of Venezuelan oil
CPPIB invested $1.2 billion in Tallgrass Energy in August 2024 and owns an estimated 24.5% stake in the fossil fuel 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 Tallgrass’ board.
In February, Invenergy, which calls itself North America’s largest privately held independent power producer, announced a deal to develop up to three new gas plants in Arizona. Names and locations of the plants were not disclosed, but the deal will see Tallgrass Energy “provide the natural gas infrastructure needed to supply the new gas plants.”
A month earlier, Wyoming officials approved a proposal for a major data centre complex that would be developed via a partnership between Tallgrass Energy and AI infrastructure developer Crusoe. As part of the project, Wyoming greenlighted the BFC Power and Cheyenne Power Hub, which includes two gas plants with 2.7 GW of generation capacity being developed by Tallgrass. Officials have said the data center complex would be designed to eventually scale to as much as 10 gigawatts (GW) of capacity, which would require additional power generation resources.
According to Inside Climate News, the project could become the largest single AI complex in the U.S., and eventually use the same amount of electricity as produced by ten nuclear power plants. The state’s governor said that data centres are “exciting” for “Wyoming natural gas producers.” When Crusoe and Tallgrass announced their partnership in July, they said the data centre campus’ proximity to Tallgrass’ existing CO2 sequestration hub will also provide long-term carbon capture solutions for the gas turbines powering the data centers. They added that “future renewable energy developments in the region” could eventually supplement the facilities’ power demand. But neither Tallgrass nor Crusoe responded to questions about how much of the data centre complex would actually be supplied by renewable energy or fossil gas outfitted with expensive CO2 capture technology.
Meanwhile, Tallgrass’ interest in fossil fuel expansion may extend beyond the U.S. In January, following the U.S.’s capture of Venezuela’s President and commitment to “run” Venezuela, Tallgrass Energy joined American oil and gas executives at the White House after President Trump summoned the CEOs to discuss how to exploit the country’s oil and gas reserves for U.S. benefit. “We’re going to be extracting numbers in terms of oil like few people have seen,” the U.S. president told oil executives at the White House. According to an exclusive analysis in The Guardian, U.S. plans to exploit Venezuela’s oil reserves could by 2050 consume 13% of the world’s remaining carbon budget to limit global heating to 1.5℃.
Canadians express concerns about CPPIB-owned Teine Energy’s methane pollution
Teine Energy is 90% owned by CPPIB. Two senior staff in CPPIB’s “Sustainable Energies” group sit on Teine’s Board of Directors.
In January, a Teine Energy site near Major, Saskatchewan experienced an oil storage tank fire, causing a plume of black smoke over the area. While Teine said that it has launched an investigation into the cause of the fire, the incident could potentially point to larger operations and pollution problems with Teine’s infrastructure.
In a webinar hosted by For Our Kids (FOK), the Canadian Lung Association (CLA) and the Canadian Association of Physicians for the Environment (CAPE), presenters showed footage of two Teine Energy facilities in Saskatchewan spewing uncombusted methane and other harmful pollutants into the atmosphere. The methane releases were captured by Optical Gas Imaging cameras – specialized infrared devices that detect and visualize invisible gas leaks in real-time. The presenter, Tim Doty, former senior regulator for the Texas Commission on Environmental Quality, says this kind of methane release would not be permitted. “This is not what you want to see at all… This is not how they’re designed to operate,” commented Doty. FOK, CLA and CAPE warn that methane from the oil and gas industry is a dangerous super-pollutant harming public health, communities, and kids’ futures.
At CPPIB’s public meeting in Calgary on February 23, a mother of two teens questioned a CPPIB executive about Teine Energy, referencing the Saskatchewan methane footage. Michel Leduc responded that he’s “not in a position to speak for Teine. We are an investor in Teine, and we have a dialogue with them as investors in their operations” and that he was “more than happy to take your specific concerns and make sure that the people who work directly behind Teine can, you know, probe and scrutinize and have a better understanding of their operations.”
Meanwhile in February, Teine announced that it entered into an agreement to acquire gas producer TMax Energy, increasing Teine’s acreage in Alberta’s Duvernay gas reservoir by 700 sections.
CPPIB-backed Civitas Resources was forced by Colorado regulator to move drilling locations further from residential areas – which could force Civitas to leave US$83 million of oil and gas in the ground
CPPIB has invested US$5.5 billion in oil and gas producer Civitas Resources and its subsidiaries since 2016. Civitas is listed on CPPIB’s website as being part of its “Sustainable Energies” portfolio.
In February, Colorado’s Energy & Carbon Management Commission voted 4-1 to order Civitas Resources to conduct a review of its planned drilling locations near the Denver suburb of Aurora. The first-of-its-kind ruling from the energy regulator follows the passage of a state law that allows the regulator to make decisions that would force oil and gas producers to leave hydrocarbons in the ground “if necessary to protect public health, safety, welfare, the environment, or wildlife resources.” Civitas opposed the ruling, claiming that it could force the company to leave oil and gas valued at US$83 million in the ground.
Clinging to its climate-wrecking business model, however, shareholders of Civitas Resources and SM Energy approved a merger that will see the formation of a “leading oil and gas company with enhanced scale” operating in Utah, Texas and Colorado.
CPPIB’s investment in Caturus Energy’s Texas gas production and Commonwealth LNG’s Gulf Coast export terminal is a risky bet on a delayed energy transition
In 2022, CPPIB committed US$100 million to private equity fund Kimmeridge Fund VI. Kimmeridge used this money to buy fracked gas assets in Texas and help finance the proposed Commonwealth LNG project on Louisiana’s Gulf Coast. In August 2025, Kimmeridge announced it is partnering with Mubadala Energy (which is part of the United Arab Emirates’ sovereign wealth fund) to form Caturus Energy, a “well to water” gas company that plans to develop enough gas to supply Commonwealth LNG. CPPIB now owns a 12% stake in Caturus.
Shortly after closing its merger with Civitas, SM Energy announced an agreement to sell its South Texas assets, including 60,000 acres of producing land and 260 producing wells, to Caturus Energy for US$950 million. Caturus called the transaction part of “its growth trajectory towards becoming one of the largest independent natural gas producers in the United States,” saying that “the acquisition of these high‑quality, well‑positioned assets is a transformational step for Caturus and further strengthens our operational scale across the Gulf Coast.” Caturus also reported that the acquisition of these producing assets “follows continued progress at Commonwealth LNG, Caturus' wholly owned 9.5 Mtpa (million tonnes per year) export facility near Cameron, Louisiana,” and listing its fossil gas offtake agreements with several companies.
CPPIB’s investments in Caturus and Commonwealth LNG appear to be a bet on a slower energy transition and more dangerous global heating outcomes. Fitch Ratings said Caturus’ “aggressive growth plans” are predicated on the belief that “meaningful energy transition will play out over several decades”, but noted that “Key transition risks arise from potential reductions in demand driven by policies designed to reduce the use of oil and gas in the global economy, and in the shorter term from policies designed to limit greenhouse gas emissions from the production of oil and gas.”
Meanwhile, Caturus is continuing its plans to build the Commonwealth LNG terminal. Despite another environmental lawsuit challenging Louisiana regulators’ permitting of the LNG facility, Commonwealth LNG is inching toward a final investment decision. In late December, Caturus authorized its purchase of compressors, gas turbines and other equipment to build the terminal. In January, Commonwealth LNG received approval from the U.S. Department of Energy to export LNG for 25 years after the project’s completion. And in February, Caturus signed 20-year agreements to supply LNG to Saudi Aramco and Mercuria Energy Trading. Aramco Trading’s president and CEO said “This agreement reflects Aramco Trading’s efforts to secure a reliable, long-term energy supply for global markets.”
CPPIB-backed California Resources Corporation acquired another oil and gas producer and reported increased reserves and production, but faces a “challenging near-term outlook”
As of December 31, 2025, CPPIB holds a 12% stake in California Resources Corporation (CRC), which is California’s largest oil and gas producer. A managing director from CPPIB’s “Sustainable Energies” group sits on CRC’s board.
In December 2025, CPPIB-owned CRC closed on its US$717-million acquisition of oil and gas company Berry Corp, adding another 20,000 bpd of oil and gas production and 120,000 acres of land with oil and gas reserves to CRC’s portfolio. According to its 2025 financial and operating results, released in March, under CPPIB ownership, CRC increased average new production year-over-year by 25%, increased proved undeveloped reserves by 190%, and increased total proved reserves by 20%. In its “2026 Outlook”, CRC says it is receiving new drilling permits and currently holds the majority of permits necessary to undertake its 2026 capital program, targeting approximately 12% year-over-year production growth and making capital investments expected to range between US$280 and US$300 million for oil and gas well drilling, completions and workovers.
Despite CRC’s acquisition of Berry and its expansion plans, market intelligence platform AlphaStreet says that CRC faces a challenging near-term outlook characterized by earnings volatility, regulatory friction, and execution risks associated with its flimsy carbon capture and storage plans.
CPPIB-backed VoltaGrid goes big on gas-powered data centres, finances Senate primary campaign of Trump-backed oil and gas lobbyist
CPPIB has committed hundreds of millions of dollars to VoltaGrid, which is part of CPPIB’s “Sustainable Energies” portfolio. A CPPIB managing director sits on VoltaGrid’s board.
CPPIB-backed, Houston-based energy services company VoltaGrid continued its business plan to power the build-out of AI data centres with fossil gas, claiming it to be a “sustainable energy solution”. As zero-emissions renewable energy is cheaper and quicker to build than gas, powering digital infrastructure with gas could create competition risks for data centre developers, lock-in carbon emissions and bring pollution to local communities. Since December 2025:
Through its collaboration with Halliburton, VoltaGrid secured the manufacturing of 400 megawatts (MW) of fossil gas power systems for delivery in 2028 to "support the development of data centers across the Eastern Hemisphere.” The companies called the investments part of their commitment to “sustainable energy solutions.” Halliburton, which owns a 20% stake in VoltaGrid, says the company’s portable gas power products are “a critical enabler for electrified oilfield services” – suggesting VoltaGrid’s partnership with Halliburton is designed to extract more oil.
About 35 miles east of Atlanta, Georgia, VoltaGrid wants to install 33 gas turbines to provide 24/7 power to a proposed data centre. VoltaGrid touted the gas turbines as a “bridge” to a permanent power solution, but neither the data centre developer nor VoltaGrid responded to media questions about how long the gas-fired turbines would operate until the data centre was connected to Georgia’s electricity grid. Local environmental groups have partnered with the Southern Environmental Law Centre (SELC) to submit objections to the data centre’s power plans, saying VoltaGrid’s gas turbines pose health risks to nearby residential neighbourhoods.
Power infrastructure and energy services provider INNIO Group announced a major order from VoltaGrid for 1.5 GW of “behind-the-meter (on-site) power generation for AI and high-performance computing infrastructure.” Under the agreement, INNIO expects to supply 300 gas engines integrated with VoltaGrid’s 25-MW gas-powered portable power units. VoltaGrid’s CEO called it a “major step forward in building the energy backbone for the AI era” that “eliminates the need for batteries.”
Meanwhile, VoltaGrid’s ambitions go beyond directly powering the AI data centre build-out and spill into politics. VoltaGrid president and CEO Nathan Ough donated US$250,000 to superPACs and election committees to bankroll an oil and gas lobbyist running in North Carolina’s Republican Senate primary who is endorsed by President Trump. Last year, Ough told the Wall Street Journal that President Trump’s fossil fuel agenda was “literally the intersection of our entire existence” and said he “just wants to build shit in America.”
Elon Musk’s CPPIB-backed data centres facing litigation after building “one of the largest fossil fuel power plants in Mississippi”
CPPIB loaned US$300 million to help finance the construction of the Colossus 2 data centre built by Elon Musk’s xAI.
Elon Musk’s xAI continues to face a steady stream of controversies that highlight reputational, legal, climate and geopolitical risks. In December, energy data company Cleanview, which is tracking around 1,000 data centres in the U.S., called xAI the “worst for the environment.” In January, The Guardian reported that xAI’s Colossus 2 data centre is powered by 41 gas turbines – many of which don’t have air quality permits – pumping greenhouse gas emissions and other harmful pollutants into the air and impacting nearby communities. The U.S. Environmental Protection Agency ruled that permitting for these turbines would fall under the federal Clean Air Act, prompting the SELC and the National Association for the Advancement of Colored Peoples (NAACP) to file their intent to sue xAI. The SELC says Colossus 2 is now one of the largest fossil fuel power plants in Mississippi and one of the area’s biggest polluters. The NAACP says xAI’s CPPIB-backed data centres are turning Black and low-income communities in the area into a “sacrifice zone.”
Under CPPIB ownership, Allete subsidiary Minnesota Power won’t let go of gas plant expansion plans, while the CEO of Allete subsidiary BNI Coal wants to run for state Republicans, citing “developing North Dakota’s energy resources” as his priority
CPPIB closed on a 40% stake in Allete, the parent company of Minnesota Power and BNI Coal, at the end of 2025, following a US$6.2 billion deal announced in May 2024. Two senior CPPIB staff sit on Allete’s board.
Shortly after the closing of its acquisition by CPPIB and Global Infrastructure Partners, Allete subsidiary Minnesota Power announced its withdrawal from the proposed Nemadji Trail Energy Center in Superior, Wisconsin, due to ongoing community and Indigenous opposition, environmental concerns, permitting delays, regulatory hurdles and litigation. Minnesota Power had previously planned to be the 50% owner and operator of the scuttled gas plant.
However, Minnesota Power also said that its need for fossil gas generation remains unchanged and the company must still “aggressively pursue” new gas power sources. Tasked by the Minnesota Public Utilities Commission with re-evaluating its plan to add gas power plants in its 15-year energy plan, Minnesota Power outlined a preference to add another 650 MW of gas-fired power generation. Renewable energy advocates, state agencies and some industrial customers are pushing Minnesota Power to pursue a 100% clean energy plan.
Across Minnesota’s western border in February, Mike Heger, the CEO of Allete subsidiaries BNI Energy and BNI Coal, announced his campaign for the state legislature in North Dakota's 33rd district. Heger said one of his key priorities, if elected, is “developing the state’s energy resources.” BNI owns and operates a lignite coal mine in North Dakota.
CPPIB must stop pretending that its investment in fossil fuels is driving the energy transition
The recent actions and activities of CPPIB’s portfolio companies in the fossil fuel sector highlight a blatant contradiction. CPPIB claims to understand that climate change poses enormous risks to its portfolio and the broader economy and financial system. Yet CPPIB’s own investment decisions and portfolio companies serve to exacerbate those climate risks by locking-in decades of climate pollution from increased fossil fuel production, the construction of gas plants, pipelines and LNG terminals, and direct support for political forces determined to dismantle policies designed to constrain fossil fuel expansion.
Last month, CPPIB executive Michel Leduc insisted that CPPIB had to keep investing in fossil fuels because its “responsible, sophisticated, engaged capital” is somehow critical to decarbonization. Based on CPPIB’s privately-owned fossil fuel companies’ activities, there is very little evidence that Leduc’s statement is credible. These companies are in fact actively making the climate crisis worse and increasing undue risk of loss for the CPP fund.
Climate stability and pension sustainability are inseparable objectives. Failing to avert the worst outcomes of climate change could make CPPIB’s mandate impossible to fulfill. And in the words of Leduc, it could make the planet “inhospitable” for Canadians hoping to collect their CPP benefits in the decades to come.
That’s why four young Canadians are suing CPPIB for failing to adequately manage climate risks while investing billions in fossil fuel expansion. Join us in supporting these young Canadians and calling on the CPPIB to stop investing in fossil fuels and start investing in a safe climate future.