Canada Pension Plan Adds $6B in New Fossil Investment, Holds 47% of Portfolio in U.S.

The pension plan that manages retirement savings for more than 22 million Canadians is under fire for an estimated $6 billion in new fossil fuel investments in 2025, even as it faces scrutiny for holding 47% of its $780.7-billion portfolio in the United States, compared to just 13% in Canada.

At $366 billion, compared to $98 billion in Canada, the Canada Pension Plan Investment Board (CPPIB) has by far the largest U.S. holdings among the country’s eight biggest pension funds, the so-called Maple Eight, a CBC analysis shows. Only the Ontario Municipal Employees Retirement System (OMERS) has higher U.S. exposure by percentage, at 55%.

The CBC report documents concern that CPP is shirking the responsibility to help build Canada’s economy. “We have a lot of dry powder, about $3 trillion that can be invested in Canada,” said Daniel Brosseau, president of Letko Brosseau Global Investment Management in Montreal, adding that CPPIB does more than just sign people’s pension cheques.

“They are also investing in things, investing in plants, equipment, and economic activity,” he told CBC. “They can influence people’s wages in Canada, they can influence the wealth of Canadians in Canada through their investments.”

CPPIB’s senior managing director, public affairs and communications, Michel Leduc told CBC the fund’s U.S. investments are proportionally lower than some of the leading international benchmarks, like the MSCI World Index and the Financial Times Stock Exchange 100. “We are not easily whipsawed by current events or by any economic or even electoral cycles, even as we monitor turmoil very carefully to avoid excessive risks,” he said.

Nor, apparently, is the fund whipsawed by the climate risk accumulating in its portfolio, Shift Action for Pension Wealth & Planet Health warned in a release last week.

Shift says CPP’s fossil fuel investments in 2025 included:

• $4.1 billion in September for a 13% stake in U.S. gas giant Sempra Infrastructure;

• $1.4 billion in October for a minority position in AlphaGen, which owns and operates gas, oil, diesel, and kerosene plants in six U.S. states;

• $421 million to ArcLight Capital Partners, for a fund dedicated at least partly to renewable energy within a private equity firm whose energy portfolio skews 81% to fossil fuels;

• $122 million to Caturus, a U.S. gas and liquefied natural gas firm.

“CPPIB spent nearly $1.2 billion on personnel alone last year, including at least 22 sustainable investing staff,” Shift Senior Manager Patrick DeRochie said in the release. “Surely there’s someone at CPPIB that recognizes the physical realities of climate change, and is warning the board and senior management about escalating climate risks. It’s bewildering that CPPIB continues to invest Canada’s retirement fund in the fossil fuels that are threatening our future.”

Last month, CPPIB earned a D grade in Shift’s annual pension fund report card, which reported a “stark and widening divide” across the sector. While “climate leaders” among Canadian pension funds “are advancing ambitious strategies, scaling up climate investments, and embedding climate risk into portfolio decisions, backsliders are going quiet on climate, retreating from commitments, and expanding fossil fuel exposure,” the group stated on the landing page for the report.

Last October, four youth from across Canada launched a lawsuit against CPPIB, claiming that the fund is failing to protect their pensions from climate risk. “If financial actors carry on with business as usual, the 3°C hothouse world of tomorrow will be bleak, and if you’re planning to retire after 2050 in that world, your pension might not be safe,” said applicant Aliya Hiri.

At the time, Leduc chastised the lawsuit as “an action against the retirement security of 22 million Canadians. We intend to do whatever is needed to uphold their interests.”