Young Canadians sue CPPIB over intergenerational climate risk
Four members of the Canada Pension Plan have launched a landmark lawsuit, arguing that the country’s largest pension fund is breaching its duty to protect contributors’ savings from climate-related risks and failing future generations of retirees.
Four young Canadians, Aliya Hirji, Travis Olson, Rav Singh and Chloe Tse, have launched legal action against the Canada Pension Plan Investment Board (CPPIB), the country’s largest pension fund, over its alleged failure to manage climate-related financial risks for younger members.
The case, filed in the Ontario Superior Court of Justice (General Division), marks the first Canadian lawsuit asserting that a pension fund’s climate strategy breaches its fiduciary duties to younger members.
Represented by lawyers from Ecojustice and Goldblatt Partners LLP, the claimants argue that CPPIB is exposing members’ savings to undue risk of loss by continuing to invest in fossil fuels and by abandoning its commitment to reach net zero emissions by 2050.
Commenting on the case, Aliya Hirji said: “If financial actors carry on with business as usual, the three-degrees-hotter world of tomorrow will be bleak — and if you’re planning to retire after 2050 in that world, your pension might not be safe.”
She added: “Every payday, CPP Investments uses our mandatory pension contributions to fund fossil fuels and worsen the climate crisis.”
"If all practices remain the same, Canadian pension funds could face investment return declines up to 50% by 2040” warned Travis Olson, another plaintiff in the case.
Context: CPPIB scales back on net zero target
The lawsuit argues that CPPIB has underestimated the financial risks of climate change to the Canada Pension Plan and that its investment strategy disproportionately endangers the retirement security of younger contributors — raising an intergenerational equity issue.
The filing follows revelations from campaign group Shift Action for Pension Wealth and Planet Health, which reported earlier this year that CPPIB had quietly withdrawn its net zero by 2050 commitment. At the time, a CPPIB spokesperson told Net Zero Investor that while the fund “remains supportive of tackling climate change”, it has “limited influence” over the companies in which it invests.
Responding to these allegations, a spokesperson for CPPIB told Net Zero Investor that the pension fund was prepared to discuss the matter in court if necessary. "CPP Investments has a clear legislated objective: we invest to maximise long‑term investment returns without undue risk of loss and manage the CPP Fund in the best interests of CPP contributors and beneficiaries. To be clear, an action against CPP Investments and its efforts to maintain the sustainability of the CPP, is an action against the retirement security of 22 million Canadians. We intend to do whatever is needed to uphold their interests"
At the same time, the pension fund said that climate change remained "one of the many material factors" it considered in managing risk and pursuing opportunities. "We respect the right of Canadians to express their views on how the CPP Fund is managed. Our focus remains on integrating climate-related considerations into our investment activities, all while remaining focused on disciplined, evidence-based investing and transparent reporting consistent with our mandate and Canadian law” the CPPIB spokesperson said.
CPPIB currently manages C$714 billion (£382 billion) in assets, including significant holdings in private markets and the energy sector. About a quarter of its portfolio is currently invested in real assets.
According to Adam Scott, director of Shift, the fund holds at least C$23 billion (£12.3 billion) directly invested in the fossil fuel industry.
Recent transactions include a C$4 billion (£2.1 billion) investment in Sempra Infrastructure, which builds and operates liquefied natural gas (LNG) pipelines across the US and Mexico.
Legal significance
While this is not the first climate-related legal challenge brought by pension members globally, it represents a significant precedent in Canada. In the UK, members of the Universities Superannuation Scheme (USS) took their trustee to court in 2021 over fossil fuel exposure, while in Australia a 23-year-old member successfully challenged REST Super for failing to disclose climate risks.
Lawyer and sustainable finance lead at Ecojustice, Karine Peloffy, said at a press conference that although the initial focus is on CPPIB, other major Canadian funds — including the C$473 billion (£253 billion) Caisse de dépôt et placement du Québec (CDPQ) — could face similar challenges. She noted that while CDPQ has made progress on fossil fuel divestment, “it is far from perfect,” leaving open the possibility of further lawsuits.
