Canadian pension funds challenged over links to the fossil fuel industry
Five of Canada’s 11 largest public pension fund boards have active ties to the fossil fuel industry, according to new research, raising concerns about fiduciary responsibility and climate oversight
Last month, Canadian pension giant CPPIB abandoned its net zero by 2050 pledge, a change that was buried in the fund’s website rather than widely announced.
At the time, the pension fund told Net Zero Investor that the decision to abandon the 2050 target was due to a disconnect with investee companies lagging behind on net zero targets, and the limited influence the pension fund could exercise over these firms.
Yet Canadian campaign group Shift raises another concern that could have influenced the decision: a third of the CPPIB board currently also hold board roles in the fossil fuel industry. The fund also remains a major investor in fossil fuels. Its CEO John Graham said just last year that, whilst the fund saw the energy transition as an “incredible opportunity”, he believed that the fund needed to continue to support the oil and gas sector.
This comes as three of its ten board members, Judith Athaide, Barry Perry and Ashleigh Everett, were also serving on the boards of energy firms Kiwetinohk, Capital Power, and Royal Canadian Securities, the holding company for gasoline retailer Domo Gasoline Corporation Ltd.
CPPIB remains a significant investor in fossil fuel infrastructure, alongside its investments in green energy. Just last year, it announced a USD$1bn investment in Wolf Midstream, enabling the company to ramp up its natural gas liquids production. Earlier in 2024, it had committed USD$300m to support Encino Energy’s oil field, though the pension fund is now looking to sell its stake.
Oil and gas production is the largest goods-producing industry in Canada, accounting for more than 3% of the nation’s GDP, compared to less than 1% in the UK.
CPPIB is not the only fund with links to the fossil fuel industry. AIMCo, PSP Investments, OMERS and the Ontario Teachers’ Pension Plan (OTPP) also have executives with ties to the sector.
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AIMCo’s board director Bob Dhillon also serves on the board of Strathcona Resources, which has lobbied for the rollback of Canada’s net zero targets. Meanwhile, PSP director Miranda Hubbs also sits on the board of Imperial Oil, which is similarly lobbying to dismantle federal climate policies, according to the report. In 2022, the company failed to disclose a five million litre toxic tailings leak to Indigenous communities for several months, Shift highlights.
Ontario Municipal Employees Retirement System (OMERS) board director Diane Kazarian also serves on the board of Gibson Energy, which has likewise signed a letter pushing for a rollback of climate policies.
Ontario Teachers’ Pension Plan board member George Lewis is also on the board of South Bow Corp., which oversees, among others, part of the Keystone Pipeline, as well as James Richardson & Sons, Limited, with energy operations through subsidiaries Kingston Midstream and Tundra Oil & Gas.
Another OTPP director, Deborah Stein, sits on the board of NuVista Energy, which also signed the letter calling for the end of federal climate protections, Shift said.
All five pension funds have been approached by Net Zero Investor about the report but were not immediately available for comment.
For Shift, the revolving door between energy firms and executive roles at pension funds raises serious concerns about fiduciary duty. The campaign group warns: “Boardroom entanglements have the potential to distort investment strategy, suppress transparency, and potentially steer public institutions away from their fiduciary duties,” the report states.
Shift also highlights that other major Canadian pension funds, most notably CDPQ, HOOPP, IMCO, and UPP do not have board members with dual roles in the fossil fuel industry.
The group recommends that, going forward, pension funds should disclose conflicts of interest more transparently, and ultimately ban simultaneous fossil fuel directorships or enforce strong recusal rules, requiring directors to abstain from decisions related to the fossil fuel industry.
Shift is also calling on the Canadian government to amend Crown appointment policies to exclude candidates with fossil fuel entanglements. It further urges the government to enact legislation such as the Climate-Aligned Finance Act (CAFA) and to improve regulatory standards to match global peers in the UK, EU and China.
