2025 Canadian Pension Climate Report Card

AP2 is a member of the Paris Aligned Asset Owners (PAAO) and has committed to achieve a net-zero emissions portfolio by 2045, including scopes 1, 2 and 3. The fund has set ambitious interim targets to reduce absolute emissions below 2019 levels by 35% by 2025 and 55% by 2030 (p. 26). AP2 has implemented the EU Paris-Aligned Benchmark (PAB) in its public equities and corporate bonds portfolios (p. 11). These portfolios target a 7% reduction in emissions intensity each year. Despite not having an explicit public financial target for green investments, AP2 reports SEK 60 billion (approximately $7.8 billion CAD) invested in “targeted sustainability investments” (p. 9).

AP2 clearly communicates that it is embracing its role and responsibility as a major asset owner in achieving a safe climate. In 2025, AP2 again increased its score on Communication of Climate Urgency through its clear articulation that ignoring climate science is incompatible with fulfilling its mission, its recognition that climate risks and opportunities must be acted on with urgency, and its determination to anchor its long-term investment strategy in a responsible and proactive response to the climate crisis (see, for example, pp. 7, 9).

AP2 sets strong expectations for external managers and through its proxy voting guidelines, although the fund has yet to disclose details of a time-bound and escalatory process for its climate engagements. AP2 has exclusions, based on revenue thresholds, for coal, oil and gas companies; additionally, AP2 excludes power companies that generate more than 50% of their revenue from fossil fuel combustion. The fund’s implementation of the PAB for global equities and corporate bonds resulted in the fund divesting from approximately 250 companies with fossil fuel exposure.

Shift completed a detailed analysis of AP2 in 2024, which you can access below.