2025 Canadian Pension Climate Report Card

The 2025 Canadian Pension Climate Report Card assesses eleven Canadian pension managers and two international pension managers on six climate categories. Cover image credit: Jim Peaco / National Park Service. Read on for information about the sources used, disclaimers and the scoring rubric and indicators.

Sources

The report’s analysis is based on publicly available information to December 31, 2025, except where otherwise noted. Sources and references are provided in endnotes to the main report and in individual pension manager analyses. In preparing the report, Shift has reviewed pension fund websites, policies, annual reports, ESG/sustainable/responsible investing reports, climate plans and strategies, regulatory filings, press releases and other publications of pension managers, as well as news articles, briefing notes and reports from NGOs, academics and civil society organizations. 

Disclaimers

Any errors or omissions are the responsibility of Shift. The information in this report does not constitute legal, investment or financial advice. The authors welcome input, feedback and corrections from readers, companies and pension fund staff, board members and stakeholders. 

Scoring

We acknowledge that given the nature of qualitative information and inconsistency across pension fund disclosures, these scores are necessarily subjective. We hope to highlight best practices, challenges and shortcomings, and facilitate a dialogue with pension managers, beneficiaries, stakeholders, sponsors and governments.

Each fund has been assigned letter grade sub-scores for each of six indicators, described below. An overall score has been extrapolated from the sub-scores. These indicators lay out a bare-minimum framework for financial institutions to credibly align with science-based climate obligations and manage climate-related risks. The full scoring rubric, applied consistently since our inaugural 2022 Report Card, can be found in Appendix C.

While Shift’s rubric was developed in 2022, it remains broadly aligned with global best practices – including frameworks published more recently by the Institutional Investors Group on Climate Change, the Net-Zero Asset Owner Alliance, the United Nations’ High-Level Expert Group on the Net Zero Emissions Commitments of Non‑state Entities, and the Science Based Targets initiative. 

The scoring rubric will be updated in 2026. For more information, see Shift’s report card beyond 2025 below.

Scoring Indicators

Paris-Aligned Target

The Paris Agreement is a legally binding international treaty on climate change that came into force in Canada in November 2016. It aims to limit the increase in the global average temperature to well below 2°C (above pre-industrial levels), and calls for further efforts to hold this increase to 1.5°C. Article 2.1(c) is especially relevant to pension funds – it commits to action that will “mak[e] finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”

The United Nations Environment Programme projected in November 2025 that long-term average temperatures will likely exceed the 1.5°C target within the next decade, but described a pathway to minimize this overshoot and return to 1.5°C by 2100. The scientific consensus makes it clear that every additional tenth of a degree matters – adding to the likelihood of catastrophic events and the potential breakdown of social, political and economic systems around the world. For investors such as pension funds, committing to net-zero by 2050 or sooner signals to portfolio companies and the wider market the seriousness of the crisis, the risks posed by exceeding 1.5°C, and the direction of travel. 

Interim Targets

Ambitious interim targets drive today’s investment decisions toward alignment to net-zero and help a pension fund manage its decarbonization trajectory on the way to 2050. Strong near-term action will cut projected losses and damages and reduce the risk of stranded assets. Weak or non-existent medium-term commitments are unlikely to be a significant driver of investment and stewardship decisions in the near term, when action is urgently needed.

Interim targets provide an accountability measure and demonstrate whether or not the fund is on track to achieve its net-zero commitment. They also act as an important signal to actors seeking pension fund investment: in order to secure investment, assets must be able to demonstrate an ability to decarbonize in line with time-bound targets.

Communication of Climate Urgency

Universal asset owners such as pension funds must communicate to plan members, sponsors, stakeholders, companies and governments that stabilizing global temperatures is necessary for fulfilling their mandate. Communicating climate urgency starts with acknowledging climate-related risks and opportunities, but it doesn’t stop there. Pension funds must acknowledge their obligation to accelerate the energy transition and influence the trajectory of corporate emissions reductions. They must recognize and name that their own investment and stewardship decisions impact the speed and scale of the energy transition (and, conversely, of the intensifying climate crisis). 

Climate Engagement

Effective climate engagement with public and private companies means setting out time-bound expectations for developing and implementing science-based transition plans, and spelling out escalatory consequences for companies that demonstrate an inability or unwillingness to align with these expectations. Within this context, engagement includes supporting portfolio companies as they develop decarbonization strategies, holding public companies accountable for setting and meeting Paris-aligned targets, and aligning with net-zero-committed external managers and investment partners. More broadly, engagement also includes advocating to governments and regulators for stringent, ambitious, Paris-aligned climate and energy laws, policies and regulations that provide certainty for companies and investors, enable Canada and other countries to achieve their climate commitments, and help limit global temperature increase to 1.5°C.

Climate Integration

While analysis of this indicator includes a general overview of how funds employ varying approaches to integrate climate into investment strategies, scoring on this indicator hones in on four signals of a fund that has embedded climate throughout its strategy: commitment to an accountable Paris-aligned investor body, disclosure of climate risk, linking executive and staff compensation to the achievement of climate targets, and governance that includes climate expertise and is not entangled with fossil fuel interests.

Fossil Fuel Exclusions

The United Nations’ High-Level Expert Group declared in 2022 that coal, oil and gas account for more than 70% of global greenhouse gas emissions, that “Net zero is entirely incompatible with continued investment in fossil fuels,” and that “Non‑state actors cannot claim to be net zero while continuing to build or invest in new fossil fuel supply.” The Science Based Targets initiative’s Financial Institutions Net-Zero Standard, published in 2025, states that financial institutions must publish a policy stating that they will end financing for companies that are expanding coal projects immediately, and end financing for those expanding oil and gas projects “immediately or by no later than 2030”. The International Energy Agency (IEA), which stated as early as 2021 that "Net zero means a huge decline in the use of fossil fuels", has in its latest World Energy Outlook described global demand for oil, coal and gas peaking within the next five years – unless more stated policies are abandoned.

Pension funds that are maintaining or increasing investments in fossil fuels are betting that the world is going to miss its climate targets, which would in turn contribute to systemic risks that threaten the stability of the entire financial system and jeopardize their own ability to meet their long-term obligations to beneficiaries. Beyond raising the risk of stranded assets, fossil fuel investments increase the cascading and far-reaching impacts of climate change on virtually all other investments and on their own beneficiaries and contributors. Pension managers should consider whether increasing, or even maintaining, fossil fuel holdings that are incompatible with the pathway to net zero presents an undue risk of loss to their portfolio and assets.

Additional Information

Shift has included additional information in this report, such as portfolio allocations to climate solutions and to fossil fuels and notable fossil fuel investments. Due to a lack of transparency, disclosure and consistency in pension fund reporting, data for these factors is likely incomplete and generally is not comparable across funds. For these reasons, this information did not directly contribute to the assigned letter grades.