CPPIB Watch: A quarterly update on CPPIB-owned fossil fuel companies (July – September 2025)

Canada Pension PlanCPP InvestmentsCPPIB
Written By Shift Action

Shift’s latest deep dive into the incompatibility of CPPIB’s fossil fuel investments and its climate obligation

Amidst a sweltering summer of climate disasters, CPPIB doubles down on fossil fuels

Amidst another summer of heatwaves, droughts and wildfires forcing Canadians to flee their homes, the Canada Pension Plan Investment Board (CPPIB) continues to own and invest in companies that are prolonging the use of fossil fuels and making the climate crisis worse. In some cases, CPPIB is directly financing the expansion of oil and gas infrastructure, causing more carbon pollution to be pumped into the atmosphere and betting the world will fail to limit global warming to safe levels. 

This is a reckless and irresponsible investment strategy for a pension fund that has a mandate to ensure the retirement security of Canadians decades into the future. As Michel Leduc, head of public affairs and communications for CPPIB, told the CBC in June, CPPIB has to invest for the long term, regardless of individual governments or administrations. "We're investing money for people who aren't even born yet," Leduc said. "That long-term thinking must be the strongest pillar of how we think about our investment strategy."

CPPIB claims to understand climate science, so why would it pour fuel on the fire?

There is certainly reason to believe that there are experts working for CPPIB who understand the urgent and existential nature of the climate crisis. In March, the CPPIB Insights Institute posted an interview with Dr. Johan Rockström, director of the Potsdam Institute for Climate Impact Research. Dr. Rockström parsed the crucial difference between a 1.5°C and 2°C temperature increase, explained that the triggering of tipping points means unstoppable and accelerating climate breakdown, and warned that five of sixteen of Earth’s complex and interconnected climate-regulating systems are likely to cross their tipping points at 1.5°C of warming. He warned that “we cannot continue allowing ourselves to destroy the stability of the climate system, and quite frankly the stability of the planet, by subsidizing unsustainable investments” (minute 29) and called on the financial sector, including pension funds, to help create confidence that “the pathway away from coal, oil and gas is the pathway to the new, more competitive attractive modernity” (minute 32).

That’s why it’s disturbing that, just four months later, CPPIB would decide to publish a profile on its investment in Canada’s largest oil and gas producer, Canadian Natural Resources Ltd. (CNRL), calling the company “a prime example of Canadian energy leadership on the global stage” and highlighting CNRL’s “long-life, low-decline” oil sands assets, “long-term production stability”, “strength of leadership” and “clear focus on the long term.” Climate change is already negatively impacting Canadian lives and livelihoods and putting a damper on economic growth – yet CPPIB thinks it’s a good idea to highlight an investment in one of Canada’s biggest carbon polluters? The long-term financial performance of CNRL is contingent on climate failure.  

Protecting the CPP from climate risks, while publicly boosting fossil fuels

In June, CPPIB published a report in partnership with the Official Monetary and Financial Institutions Forum (OMFIF) and other pension managers, including the Healthcare of Ontario Pension Plan, called "Investing in a changing world: How public funds are addressing climate-related physical risks." The report suggests that, instead of doing what's necessary to prevent this devastating threat to their members' retirement security, these pension managers are planning to attempt to adapt their portfolios to a world of catastrophic climate change. The CPPIB/OMFIF report:

  • notes that current government climate policies could lead to a catastrophic 3.1°C of global heating;

  • examines why, in a context of regressive governments and stalling climate momentum, investors must pay more attention to physical risks; and

  • finds that financial markets have failed to adequately price the systemic, chronic risks associated with long-term climate change.

According to the report, CPPIB and other investors are trying to manage the increased physical risks by:

  • collecting better climate data;

  • forecasting potential impacts and exposure under different climate scenarios;

  • trying to get companies to disclose better climate risk data and implement adaptation measures;

  • exploring investment in adaptation solutions, such as flood protection infrastructure, wildfire-resistant real estate and coastal defence systems.

While it's certainly critical for institutional investors to protect their portfolios from physical climate risks, the CPPIB/OMFIF report says nothing about the role investors must play in preventing these catastrophic climate outcomes in the first place. The report focuses on how investors can limit the impacts of climate change on their assets, but ignores the imperative for investors to stop investing in the problem – oil, gas, coal and pipelines – and downplays the need for investors to use their influence, capital and voice to accelerate the global transition away from the fossil fuels that is are driving the climate crisis. 

The report also demonstrates CPPIBs failure to fully understand the threat of climate risks for its portfolio. The most serious financial risks to CPPIB’s investments aren’t actually physical impacts faced by individual companies and assets, but are in fact systemic risks to the entire global economy. The systemic risks of climate failure are not fully captured in CPPIB’s analysis. A report from the U.K.-based Institute and Faculty of Actuaries warned that without immediate action to change course, the global economy could face 50% loss in GDP between 2070 and 2090. Such risks are an existential threat to the CPPIB's mandate – not to mention to the ecological systems on which the global economy depends.

The report appears focused on how large investors like CPPIB can prepare themselves for "business as usual" as the climate crisis worsens, rather than doing what’s necessary to prevent the worst outcomes of climate change for citizens and pension plan members. This passive approach is not in line with CPPIB’s mandate and is putting the pension savings and retirement security of millions of Canadians at risk.

What have CPPIB’s fossil fuel companies been up to this summer?

Even as CPPIB moved to exit a couple of large climate polluters in its portfolio this summer, the fund continued to hold onto its stakes in numerous companies in the business of expanding and prolonging the use of fossil fuels.

Read on for the full details.

CPPIB divests Ohio oil and gas producer – after financing its fracking expansion plans

Until CPPIB divested this summer, Encino Acquisition Partners was 98% owned by CPPIB and part of its “Sustainable Energies” portfolio. Before the divestment, a CPPIB managing director sat on Encino’s board. CPPIB has invested US$1 billion in the oil and gas company.

In August, CPPIB officially divested its 98% stake in Encino Energy, one of the largest oil and gas producers in Ohio. CPPIB has owned Encino since 2018, when our national pension manager “envisioned creating a company that would be a leader in acquiring U.S. oil and gas assets.” Most recently, CPPIB invested US$300 million in Encino on Earth Day 2024 to facilitate the expansion of fracking in Ohio for years to come. This helped Encino become the state’s number one oil and gas expansionist in the final quarter of 2024. 

In announcing its acquisition of Encino Energy in August, new owner EOG Resources said “this strategic move… is expected to enhance EOG’s operational capabilities and market positioning in the energy sector”. EOG bragged that its acquisition of Encino represents “more than two billion barrels of oil equivalent per day.”

Canadians should be under no illusion that CPPIB stewarded Encino Energy in a way that was aligned with the retirement security of Canadians – which is dependent on climate stability.

CPPIB announces divestment of its 49.9% stake in pipeline company transporting fracked gas from Peruvian Amazon

CPPIB first invested in Transportadora de Gas del Peru S.A (TgP) in 2013, and provided additional financing between 2014 and 2017 for a total of US$1.4 billion. As of September 2025, three senior CPPIB staff sit on TgP’s board of directors.

In August, CPPIB reached an agreement to sell its 49.9% stake in TgP to EIG, a global investor in the energy and infrastructure sectors. TgP operates a pipeline that transports fracked gas from the Camisea gas fields in the Peruvian Amazon to the country’s coast. Virtually all of the fossil gas produced in Peru passes through this 730-km pipeline, supplying about 40% of Peru’s electricity generation. CPPIB did not disclose the value of the sale of its 49.9% stake in TgP, nor has it developed a credible climate transition plan for TgP.  

Canadians should be relieved to learn that CPPIB is no longer the owner of a company transporting fracked gas from the Peruvian Amazon. Continuing to support fossil fuel infrastructure like TgP’s pipelines is incompatible with climate safety and the retirement security of Canadians.

However, CPPIB will continue to be exposed to the escalating physical climate risks stemming from its decision to finance the Peruvian pipeline company, with CPPIB’s head of infrastructure saying he “looks forward to seeing TgP’s continued success under EiG.” TgP is in negotiations with the Peruvian government to continue its pipeline’s operations until at least 2044 and is also proposing to build a new gas pipeline along the Peruvian coast.

CPPIB invests US$300 million to expand Elon Musk’s methane-spewing data centre complex in Memphis

According to its First Quarter Fiscal 2026 results, announced on August 14th, CPPIB invested US$300 million to help finance the construction of xAI’s second data centre in Memphis, Tennessee. 

xAI was founded by Elon Musk and developed Grok, the AI chatbot widely known for praising Nazis and generating racist responses. It is deeply problematic that CPPIB is using money from Canada’s national pension fund to support this company. There is a serious climate problem with CPPIB’s xAI investment, as well.

xAI is embroiled in controversy, lawsuits and protests over the unpermitted gas turbines used to power its data centre complex in Memphis. The gas turbines are causing poor air quality and dumping pollution into low-income, historically Black neighbourhoods, resulting in a lawsuit from the National Association for the Advancement of Colored People. The gas-powered data centres have become one of the biggest polluters in the heavily-industrialized Tennessee county, while anonymous groups have distributed propaganda to downplay the pollution. A video recorded by Oil Field Witness shows vast plumes of pollution coming from xAI’s gas turbines.

During CPPIB’s 2024 National Virtual Public Meeting in November 2024, CPPIB CEO John Graham described how “the demand for energy globally is not declining” and AI is “further driving the demand for energy.” Graham inaccurately said that CPPIB needs to “continue to support the oil and gas industry” because the “industry has a long track record of delivering energy into the economy in a very safe and economical way.” In reality, building new AI infrastructure does not have to drive an increase in demand for fossil gas, with lower-cost renewable energy available, but CPPIB appears to be focusing its AI investments on gas-fired data centres. 

CPPIB publishes spotlight celebrating its investment in Canada’s largest oil and gas producer

CPPIB first invested in Canadian Natural Resources Ltd. (CNRL) in 2012 and increased its investment in CNRL by $1 billion in 2017. As of June 30, 2025, CPPIB held nearly US$1.2 billion worth of shares in CNRL.

Amidst another summer of heatwaves, droughts and wildfires, CPPIB made a bizarre decision to profile its investment in Canada’s largest oil and gas producer while downplaying the existential risks of climate change. 

In July, the CPP Investments Insights Institute spotlighted Canadian Natural Resources Ltd (CNRL), calling the company “a prime example of Canadian energy leadership on the global stage” and highlighting CNRL’s “long-life, low-decline” oil sands assets, “long-term production stability”, “strength of leadership” and “clear focus on the long term.”

This profile reads like a propaganda piece for the oil and gas industry. It fails to acknowledge that CNRL’s business model is fundamentally incompatible with a safe climate future or CPPIB’s mandate to protect our long-term retirement security.

No objective observer would make the case that CNRL has a credible climate plan. CNRL’s emissions are increasing and its business model is predicated on expanding production. The company and its industry associations undertake significant lobbying against climate regulations, aiming to prolong the production and use of oil and gas.

CPPIB continues to ignore the increasingly dire scientific warnings about the climate crisis and double down on financing oil and gas expansion. What kind of world does CPPIB expect Canadians will retire into?

Read our August 2025 blog for a deep dive on CPPIB’s spotlight on CNRL, and why it’s so problematic.

CPPIB-owned Tallgrass Energy considering $6-billion, 900-mile fracked gas pipeline – which would supply its proposed gas-powered AI data centre campus

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 .

Tallgrass Energy is planning a new pipeline that would cost billions of dollars and lock in the use of Texan fossil gas for decades to come. The pipeline is proposed to transport up to 2.4 billion cubic feet per day of gas from multiple points in Texas' Permian Basin to Tallgrass Energy's Rockies Express Pipeline and onward to major U.S. markets.

According to S&P Global, Tallgrass’ proposed pipeline could be in service by 2028 and would provide additional transportation options for Permian producers to supply new data centres and gas plants across the U.S. There is currently significant uncertainty about the potential pipeline out of the Permian, including where it would start, where it would intersect the Rockies Express Pipeline, and who the shippers might be. But industry outlet RBN estimates that the pipeline could be 900 miles long and cost $6 billion.

Relatedly, Tallgrass Energy is partnering with AI infrastructure company Crusoe to build a 1.8-gigawatt (GW) AI-focused data centre campus in southeastern Wyoming. According to oil and gas market analytics company East Daley Analytics, the AI facility will be designed to scale to 10 GW, and will primarily be powered by fossil gas and “future renewable resources.” 

East Daley estimates that the first phase of the data centre campus could require up to 400 million cubic feet of gas per day when fully operational. The analysts speculate that Tallgrass is lining up Crusoe as a shipper that would secure capacity on Tallgrass’ proposed fossil gas pipeline, thereby ensuring Crusoe’s data centre campus would be supplied and powered by Permian fracked gas.

The Crusoe-Tallgrass partnership fits with recent analysis from Fitch Ratings that pipeline companies are planning to build “data centre-driven pipelines” that “provide diversification benefits” as demand for fossil gas from residential and industrial customers levels off. Fitch notes that some “firms are moving beyond traditional pipelines, entering in joint ventures or partnerships to develop gas-fired generation or sell power directly to data centers and utilities via (power purchase agreements),” mentioning the Tallgrass-Crusoe data centre partnership as an example. Fitch says these ventures tend to lock data centres into 20-25-year gas supply contracts, and carry risks related to overly optimistic demand growth expectations, overestimations of the need for AI projects, and improved electric grid efficiency. 

During CPPIB’s 2024 National Virtual Public meeting in November 2024, CPPIB CEO John Graham described how “the demand for energy globally is not declining” and AI is “further driving the demand for energy.” Graham said that CPPIB needs to “continue to support the oil and gas industry” because the “industry has a long track record of delivering energy into the economy in a very safe and economical way.” It appears that CPPIB is betting that the expansion of AI infrastructure will drive an increase in demand for fossil gas, and is planning to finance and profit from gas-fired data centres.

CPPIB-backed Civitas Resources facing charges from Colorado energy regulator

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 dubiously-named “Sustainable Energies” portfolio.

CPPIB-backed Civitas Resources is facing scrutiny from regulators with one of its contractors being caught allegedly falsifying lab reports, downplaying the levels of harmful pollutants from its operations in Colorado. The Colorado Energy and Carbon Management Commission issued notices of alleged violations over falsified data from soil samples that under-reported the levels of arsenic, barium, benzene and other carcinogenic pollutants at Civitas oil and gas sites. 

Meanwhile, the Center for Biological Diversity and 350 Colorado are suing the Colorado government for failing to ensure two oil and gas facilities in the Denver metro area are complying with state and federal clean air laws. One of the two facilities targeted by the lawsuit is an oil and gas processing plant operated by Crestone Peak Resources, a subsidiary of Civitas that was 95% owned by CPPIB before merging with other companies to form Civitas in 2021. The lawsuit says the Crestone facility is operating with outdated air pollution permits, leading to poor air quality and toxic pollutants that are endangering public health. 

CPPIB-owned oil and gas company pushing to weaken environmental regulations and drill new wells in California

CPPIB holds an 11.2% 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.

CRC is pushing for looser climate and environmental regulations so that it can acquire new permits to drill for oil and gas. The regulatory changes would increase in-state oil production by exempting certain environmental permits required to drill new wells and allowing companies to drill without requiring individual permits from the California Geologic Energy Management Division.

CRC’s push to weaken environmental regulations, drill new wells and increase production contradicts CPPIB’s claims that CRC is “committed to energy transition.”

CPPIB-backed private equity firm partnering with UAE sovereign wealth fund to export Texan fracked gas from Trump-approved LNG terminal

In 2022, CPPIB committed US$100 million to private equity fund Kimmeridge Fund VI. Kimmeridge then used this money to buy fracked gas assets in Texas and help finance the controversial Commonwealth LNG project. 

Kimmeridge is partnering with Mubadala Energy (which is part of the United Arab Emirates’ sovereign wealth fund) to form Caturus Energy, which will bring Kimmeridge’s upstream fracked gas assets in Texas under the same company as the Commonwealth LNG terminal. The new partnership with Mubadala will help Commonwealth acquire billions in financing to build the new LNG terminal, reflecting Mubadala’s entry into the US market and its “ambitious expansion strategy.”

The investment is a clear bet against a climate-safe future. Caturus’ chief executive says Kimmeridge’s rebrand reflects the company’s “continued evolution and strategy to capture value as global gas demand increases in the future.” The new “well to water” gas company plans to develop enough gas to supply the proposed Commonwealth LNG terminal on Louisiana's Gulf Coast. The Trump administration is trampling local opposition and softening the regulatory path for Commonwealth LNG to be built. The U.S. Secretary of Energy announced final authorization for Commonwealth LNG on August 29th, saying that it “advance(s) President Trump’s energy dominance agenda.”

If it hadn’t been hidden behind a shady private equity deal, would Canadians support a $US100 million CPPIB investment in an American private equity fund to buy Texas fracked gas assets, finance an LNG terminal in Louisiana, and partner with the UAE’s sovereign wealth fund to push forward a Trump-backed carbon bomb? The saga of Kimmeridge Fund VI reflects the danger of CPPIB funneling the Canada Pension Plan into opaque private equity funds that lock in the use of fossil gas for decades to come. 

CPPIB-backed American private equity funds are causing billions in health damages

CPPIB first committed US$200 million to Quantum Capital Partners V, a private equity fund for oil and gas, in 2008. CPPIB followed that up with a US$300 million commitment to Quantum Energy Partners VI in 2014, "a fund primarily focused on acquisition and development opportunities in the upstream oil and gas exploration and production sector in the U.S." In 2024, CPPIB committed US$500 million to Quantum Capital Solutions Fund II, a private equity fund that will invest primarily in the "conventional energy sector in the U.S." 

A new report by the Private Equity Stakeholder Project (PESP) found that air pollution from select private equity-backed fossil fuel infrastructure causes the equivalent of US$11-15 billion in health damages per year in the US. The PESP report examined the public health impacts caused by emissions of non-greenhouse gas pollutants – including sulfur dioxide, nitrogen oxides, volatile organic compounds, and fine particulate matter – from private equity-backed coal plants, LNG export terminals, and oil and gas extraction facilities.

One of the worst culprits is Quantum Capital Group, a private equity firm whose energy funds have received US$1 billion from CPPIB. PESP estimates that air pollution from Quantum's oil and gas extraction facilities results in nearly US$2.5 billion per year in health costs, including emergency room visits, asthma, lost days of school and work, and premature deaths.

“Private equity plays an outsized yet obscured role in the fossil fuel economy," said Alex Hurley, Project Manager of the Global Energy Monitor and lead author of the PESP report. "These findings shine a light on how people’s health is directly impacted by these investments and reinforce the critical need to transition away from fossil fuels."

CPPIB is aware of climate tipping points, yet doubles down on fossil fuels

The climate crisis is here, and it’s going to get worse as long as the world continues to produce and use oil, gas and coal. CPPIB can’t claim ignorance, having brought in one of the world’s most prominent climate scientists to explain that we are approaching dangerous tipping points and need to rapidly shift our energy systems off of fossil fuels. The best financial outcome for CPPIB and for Canadians requires urgent, new action to stabilize the climate as quickly as possible. 

That’s why it’s so disturbing that CPPIB is investing in gas-fired data centres, financing LNG terminals, and spreading oil and gas industry propaganda, while its portfolio companies build new gas pipelines and lobby against climate policies. 

This has to stop, and there are clearly hard-working, dedicated staff at CPPIB who are aware of these existential, systemic climate risks. But CPPIB’s leadership and board appear to be ignoring these increasingly dire warnings from climate scientists, as our national pension manager abandons its net-zero commitment and doubles down on fossil fuels.

Canadians can join us in calling on the CPPIB to stop investing in fossil fuels and start investing in a safe climate future. 

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