The Canada Pension Plan (CPP) is no longer maintaining its commitment to achieve net-zero emissions by 2050.
The $700 billion plan’s investment board (CPPIB) said May 21 on its website that while achieving net-zero emissions remains a widely adopted goal for many countries, it presents “risks and opportunities” for investors. It said “recent legal developments” in Canada have changed how net-zero commitments are interpreted.
“In particular, there is increasing pressure to adopt standardized emissions metrics and interim targets, many of which don’t reflect the complexity of a global investment portfolio like ours,” the pension fund said.
The pension fund’s board did not explain what recent legal developments it was referring to, and had not responded to The Epoch Times’ request for comment by publication time.
The CPP’s investment board announced in 2022 it was committing to net-zero emissions by 2050, both for its own operations and investment portfolio. It planned to achieve carbon neutrality for its internal operations by 2023, increase its investments in green assets from $67 billion to at least $130 billion by 2030, and seek out “attractive returns from enabling emissions reduction and business transformation in high-emitting sectors.”
In late 2024, the CPP still held 3.5 percent of the plan in fossil fuel production, roughly $22.6 billion. That year, the CPP made six new investments in fossil fuel production, including $405 million in fracking expansion in Ohio, $1 billion to increase Alberta’s fossil fuel production, and $1.2 billion in oil and gas pipelines in the U.S. Midwest.
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CPPIB said on May 21 that divesting from sectors like the oil and gas can have the unintended consequences of “pushing activities to less transparent, private markets.” The board said it will encourage companies to make progress on decarbonization, and reserves the right to sell an asset if it believes a company is not managing “material sustainability-related risks.”
While the CPP has moved away from its net-zero promise, it has continued to make investments in electric vehicles. CPP’s investment board has more than quadrupled its holding of Tesla stock in the last year, increasing its holdings from 618,000 to 2.9 million shares. It had $1.07 billion in the company’s stock as of March 31.
CPP’s announcement comes at a time when many corporations and banks have been divesting from net-zero initiatives.
Four of Canada’s largest banks announced in January they would leave the United Nations-backed Net-Zero Banking Alliance. The Bank of Montreal, TD Bank, National Bank of Canada, and the Canadian Imperial Bank of Commerce followed six other American banks in leaving the alliance ahead of the inauguration of U.S. President Donald Trump.
BlackRock, an investment company that manages $11.5 trillion in assets, also withdrew from the Net Zero Asset Managers initiative in January. A company spokesperson told The Epoch Times that while the company’s membership in the initiative did not impact how it managed client portfolios, it led to legal inquiries from public officials and confusion about the company’s practices.
