The Canada Pension Plan Investment Board (CPP Investments) has committed to invest $843m in US infrastructure company Tallgrass Energy.
CPP Investments, the investment management arm of C$632.3bn Canada Pension Plan, has signed and closed a definitive agreement to invest in Tallgrass Energy in partnership with manager Blackstone.
Tallgrass Energy is an operator of natural gas and oil pipelines in the US. In addition, it also engages in the development of hydrogen, renewable fuels and decarbonised power assets, operating a network across 12 states in the US.
“With a business strategy that combines traditional energy and decarbonisation solutions, Tallgrass is an attractive investment opportunity because of its dual role in delivering against growing energy needs and increasing decarbonisation opportunities,” Bill Rogers, managing director, global head of sustainable energies at CPP Investments, said.
However, the decision to invest in Tallgrass has been criticised by Canadian campaign group Shift Action for Pension Wealth and Planet Health (Shift) which points out that fossil fuels are the firm's core business. Tallgrass operates three crude oil pipelines and nine oil storage terminals alongside multiple gas pipelines. It has come under criticism from environmental campaigners last year after satellite footage revealed a five mile long cloud of methane over its Wyoming gas facility.
Shift pointed out that the investment in Tallgrass marks CPP's fifth investment in the fossil fuel sector in 2024. It also criticises CPP for including fossil fuel firms in its Sustainable Energies Group. "CPPIB cynically calls Tallgrass an “energy infrastructure company”, obscuring the fact that its core business is transporting oil and gas. The Tallgrass acquisition was brokered by CPPIB’s dubiously-named “Sustainable Energies” group– a portfolio that includes renewable energy, energy efficiency and conservation, and agriculture companies, but also oil and gas producers, pipeline companies, gas-fired power producers and carbon capture utilization and storage infrastructure for oil and gas" Shift said in a statement in response to the announcement.
In 2021, CPP Investments created the Sustainable Energy Group, which currently has net assets of approximately c$34.2bn, including investments in renewables, conventional energy, carbon capture and storage as well as distributed and energy services.
Examples of CPP's investment in renewable energy include a $905m allocation to US-based renewable energy and transmission company Pattern Energy Group in the last quarter of 2023 and an additional $300m in Octopus Energy Group in January.
This article has been amended on 16.8.2024 to clarify that Tallgrass' core business is in the fossil fuel industry and include Shift's response.
