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National Observer
26-05-2025
- Business
- National Observer
Pension fund's climate decision makes all Canadians more vulnerable
Canadians may trust their banks, but when it comes to their pensions, it's closer to the faith of religious devotees. Irrespective of whether they take an active role in managing their pensions, few Canadians entertain the possibility their pension might not be there when they retire. There's a good reason for this — Canadian pensions are generally well-regulated, and the government takes an active role in their management. For this reason, many Canadians assume pension funds are ethically invested, and fund managers are doing their due diligence. We might soon be in for a very rude awakening. Recent research by Ortec Finance suggests that Canadian pension funds are second only to those in the United States in terms of their vulnerability to the climate crisis. Their modelling suggests that climate change could erode Canadians' pension returns by as much as 44 per cent in the next 25 years. Canadian pension funds have a fiduciary responsibility to remain solvent and stable, which is why they need to plan to address the financial challenges posed by climate change. They also need to refrain from exacerbating the underlying causes of it. And among all public and private pensions in Canada, no one is more responsible for leading by example than the Canada Pension Plan Investment Board (CPPIB), the Crown corporation that manages the Canada Pension Plan (CPP). Unlike other pensions, both public and private, practically everyone is entitled to CPP, and most of us will depend on it in our retirement. One might presume that, for this reason, the CPPIB would be among the world's most conservative and risk-averse pension fund managers. After all, it manages $714.4 billion on behalf of 22 million Canadians, and is among the largest pension funds in the world. And yet, it would seem that the CPPIB has quietly abandoned its net-zero commitments made initially in 2022. According to the CPPIB's 'Approach to Sustainability' FAQ section: Recent legal developments in Canada have introduced new considerations around how net-zero commitments are interpreted. In particular, there is increasing pressure to adopt standardized emissions metrics and interim targets (…) forcing alignment with rigid milestones could lead to investment decisions that are misaligned with our investment strategy. To avoid that risk (…), we have made a considered decision to no longer maintain a net-zero by 2050 commitment. Many Canadians assume pension funds are ethically invested, and fund managers are doing their due diligence. We might soon be in for a very rude awakening. The CPPIB's justification makes no sense. Far from being a 'rigid milestone,' net-zero by 2050 — first articulated as a global goal at the Paris Climate Conference in 2015 — was widely criticized for being 'too little, too late.' Moreover, the CPPIB's opposition to adopting 'standardized emissions metrics' and 'interim targets' seems odd for a pension fund whose job it is to meticulously scrutinize its investments and the general investment climate to ensure its long-term viability. If the investment board is not concerned about clear metrics and timely reporting, who is? And as far as 'misalignment' is concerned, it's worth considering that CPPIB is moving against the grain among Canada's major pension funds. According to Shift Action for Pension Wealth & Planet Health — a Canadian charitable organization that works to protect the climate as much as our pensions — seven of Canada's largest pensions have maintained their net-zero commitments, despite facing the same 'recent legal developments' (Shift Action and some other critics believe this is in reference to anti-greenwashing amendments made to the Competition Act last year). In a statement, Shift Action indicated its belief this could be interpreted as a tacit admission CPPIB was aware its net-zero commitments may not have been in line with international standards. If this is the case, the Canadian public deserves to know not only why the CPPIB has abandoned its net-zero commitments, but further, why it didn't take the amendments to the Competition Act as an opportunity to improve and specify those commitments. Furthermore, it's ironic that the CPPIB would argue it's abandoning its net-zero goals out of an apparent concern for risk, when the whole point of a 35-year transition toward carbon neutrality was to minimize the risks associated with climate change in the most incremental and business-friendly way possible. Does the investment board think the investment climate is going to become less risky as we move deeper into the climate crisis? Does it think abandoning already unambitious net-zero goals will have the effect of increasing market stability? Does it not realize this retreat from even modest carbon-neutral ambitions will likely have an unintended trickle-down effect on other Canadian pension funds? If the CPPIB is giving up, why should anyone else bother? According to Shift Action, Canada's largest pensions manage a combined $2.5 trillion. Their investment decisions play a big role in determining whether there's capital for renewables, energy transition, and decarbonization, or continued investment in the very fossil fuels that are undermining economic stability. It's not just all the current and potential recipients of CPP who deserve an unambiguous explanation for their actions; it has a responsibility to be a good corporate citizen and shine a light forward for all other pension funds — not to mention the business community more broadly. That a public corporation with such an obvious duty to taxpayers as much as other pension funds would so willingly shirk its responsibilities is as unacceptable as it is unconscionable. It isn't, however, surprising. Shift Action publishes an annual Canadian Pension Climate Report Card, and the CPPIB was among the very worst performers in 2024, earning the second to lowest overall grade. Shift Action noted that the CPPIB continues to make investments in the fossil fuel sector, despite scientific consensus on the root cause of climate change, as much as a growing economic consensus that Canada's days as an energy exporter are numbered. The CPPIB — like all pension fund managers — has a responsibility to do its due diligence, but this is unlikely to occur in a country in which politicians and much of the establishment media and business class are happy to parrot industry-approved narratives forecasting sunny days ahead for fossil fuels. This is neither realistic nor responsible.
Mint
23-05-2025
- Business
- Mint
CPPIB's India portfolio touches $22 billion in FY25
The Canada Pension Plan Investment Board (CPPIB), operating as CPP Investments, saw its India portfolio touch a record C$30 billion (about $22.7 billion) in net assets in 2024-25, showed its latest annual report. Its key investments of the fiscal year were $100 million (C$137 million) in private equity fund Kedaara Capital's new fund and an undisclosed amount in venture capital firm Accel's eighth fund. It also infused $100 million (C$137 million) alongside PE firm PAG for about a 14% stake in the combined entity of Manjushree Technopack and Pravesha. It invested another $100 million (C$137 million) alongside EQT Private Capital Asia for a 5% stake in Perficient Inc., $8 million (C$11 million) in edtech startup Eruditus, and nearly $244 million (C$335 million) in National Highways Infra Trust. The investment company had assets under management (AUM) worth C$28 billion (about $20.3 billion) in India in 2023-24. It also made handsome gains during the year. It earned nearly $220 million (C$298 million) in net proceeds from the sale of its 6% stake in logistics company Delhivery, $52 million (C$71.5 million) in net proceeds from its stake sale in One Paramount 1, and an undisclosed return from a partial stake sale in National Stock Exchange of India. Its credit investments in India also crossed over $800 million (C$1.1 billion), including a $353 million (C$486 million) transaction in the extension of a senior secured loan to business outsourcing company Straive; $250 million (C$344 million) in a loan facility to Cohance Lifesciences and Suven Pharma, combined and owned by Advent International; and a $185 million (C$255 million) investment into an India rupee dominated debt facility for the US-based Enfinity Global. Overall, it ended the fiscal year with net assets of C$714.4 billion across all geographies, compared to C$632.3 billion last fiscal year. The C$82.1 billion increase in net assets consisted of C$59.8 billion in net income, one of its highest in history, and the remaining in net transfers. 'The fund's performance during the fiscal year was strong, with all investment departments contributing to one of the highest levels of annual net income in our history, despite market headwinds in the final quarter,' said its president and chief executive, John Graham. The fund generated a net return of 9.3% for the fiscal year. With strong returns across multiple asset classes, the strengthening of other countries against the Canadian dollar was a significant contributor to the investment firm's gains through the year. CPP Investments noted that public equities, especially in the US and China, delivered gains despite geopolitical and trade-related headwinds in the March quarter. Other investments in private equities, infrastructure, and credit, which benefited from tightening credit spreads, also contributed positively to the returns. While CPP does not disclose individual country investments by the year, the US was its highest-performing market, with a net return of 12.7% year-on-year, followed by Europe (8.8%), Canada (8.1%), and Asia Pacific (7.3%). However, it booked a loss of 1.6% in Latin America due to a weak Brazilian real against the Canadian dollar and losses in Brazilian public equity investments, particularly in the energy sector. It started operations in India in 2009 with its inaugural investment in Multiples Equity and opened its first office in Mumbai six years later.
Canada Standard
22-05-2025
- Business
- Canada Standard
Canada Pension Plan Abandons Net-Zero Commitment
The national pension plan that safeguards the retirement savings of 22 million Canadians has become the latest major financial institution to walk from its net-zero climate commitments, and appears to be laying the blame on anti-greenwashing provisions that were added to the federal Competition Act last year. "Achieving net zero by 2050 remains a widely adopted goal and critical ambition for many countries, companies, and international organizations," the Canada Pension Plan Investment Board (CPPIB) says [pdf] in its annual report released yesterday. But the report falls short of reaffirming the net-zero commitment the fund announced in 2022, while steadfastly refusing to abandon its fossil fuel investments. Instead, CPPIB simply states that "the fulfillment of commitments made by governments, technological progress, fulfillment of corporate targets, changes in consumer and corporate behaviours, and development of global reporting standards and carbon markets will determine the pace of the transition to net zero." In the FAQ section of its Approach to Sustainability web page, CPPIB explains that "recent legal developments in Canada have introduced new considerations around how net-zero commitments are interpreted," resulting in "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." Those "rigid milestones could lead to investment decisions that are misaligned with our investment strategy," CPPIB adds. "To avoid that risk-and to remain focused on delivering results, not managing legal uncertainty-we have made a considered decision to no longer maintain a net-zero by 2050 commitment." The FAQ material appears on a page where Chief Sustainability Officer Richard Manley declares that "companies that effectively anticipate and manage material sustainability-related factors are better positioned to be more profitable and resilient over the long term." A CPPIB spokesperson did not reply to an email requesting further detail on the announcement. The news from CPPIB echoes the Royal Bank of Canada's late April decision to abandon its $500-billion sustainable finance pledge and stop public disclosures on its updated climate strategy, citing the new anti-greenwashing provisions in the Competition Act. At the time, legal and climate policy experts said the new rules shouldn't be a problem for companies that were telling the truth about their climate performance-or that were working in good faith to meet their commitments, even if they ultimately fell short. "Walking away from a climate commitment when asked to prove its credibility raises serious concerns about the integrity of that commitment in the first place," Sen. Rosa Galvez (ISG-Quebec), who worked to introduce and pass a Climate-Aligned Finance Act (CAFA) in the last Parliament, said at the time. "Moreover, by abandoning its claims, RBC has demonstrated that the provisions of the Competition Act that intend to address greenwashing are in fact serving their purpose." In a media release Wednesday, Toronto-based Shift Action for Pension Wealth and Planet Health said CPPIB's investment and asset management decisions "have been misaligned with a credible net-zero strategy ever since it first made this commitment in 2022," continuing to invest in fossil fuel expansion "in violation of credible science-based commitments and prudent due diligence" against climate risk. "Net-zero commitments are not optional," Shift Action wrote. "They have become essential tools to manage risk and maximize long-term financial returns for pension funds. Climate impacts are already reducing global GDP growth, threatening the stability of financial markets and disrupting lives and livelihoods in Canada and around the world," and pointing to a future where "pension funds like CPPIB are unlikely to generate the stable, future returns necessary to pay out their long-term obligations." Canadians under 40 who are now in the work force "won't be eligible to receive their CPP benefits until after 2050," the release adds. "What kind of a world are Canadians expected to retire into? How would CPPIB be able to sustain benefits in a world of climate breakdown?" Source: The Energy Mix
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Business Standard
21-05-2025
- Business
- Business Standard
CPP Investments' India portfolio hits $21.68 bn in net assets in 2025
Canada Pension Plan Investment Board (CPP Investments) is accelerating its exposure to India's high-growth sectors even as its India portfolio surpasses a milestone, exceeding C$30 billion (US$21.68 billion) in net assets in 2025. CPP, which manages C$516 billion globally, disclosed in its Fiscal 2025 report that it sold its entire 6 per cent stake in Delhivery. The Canadian fund had initially invested in the Gurugram-based logistics company in 2019, capitalising on India's e-commerce-driven delivery boom. Simultaneously, CPP is doubling down on India's energy transition and infrastructure modernisation. The fund completed a follow-on investment of Rs 2,080 crore (C$346 million) in the units of the National Highways Infra Trust (NHIT), an Infrastructure Investment Trust sponsored by the National Highways Authority of India. Since its initial investment in 2021, CPP has invested Rs 5,760 crore in NHIT to date. Further diversifying its portfolio, CPP backed a consumer-focused transaction by investing US$100 million for a 14 per cent stake in the combined entity of Manjushree Technopack and Pravesha Packaging. The deal, executed alongside PAG, forms one of India's largest rigid plastic packaging platforms, aligned with the country's growing consumption demand. CPP's India exposure now spans infrastructure, renewables, consumer products, and logistics—an intentional diversification aligned with India's macroeconomic growth trajectory. The fund's continued deployment of rupee-denominated instruments reflects increasing comfort with local currency exposure. With India continuing to attract long-term capital, CPP's expanding footprint signals sustained institutional confidence in one of the world's fastest-growing major economies.
Toronto Star
21-05-2025
- Business
- Toronto Star
CPP Investments sees opportunity in Carney's call for nation-building projects
The head of the Canada Pension Plan Investment Board sees opportunities for the big investment fund in Prime Minister Mark Carney's desire for large-scale, nation-building projects. CPP Investments chief executive John Graham says the fund has an appetite to continue growing its Canadian assets. 'We're excited that it's going to lead to some pretty interesting domestic investment opportunities,' Graham said in an interview Wednesday. ARTICLE CONTINUES BELOW Carney won the federal election last month after campaigning on a plan to remove internal trade barriers and build large projects that can bolster the country's economic resilience. The prime minister has also indicated he's open to building more pipelines if there is consensus across the country in favour of it. Graham said it has been challenging to invest in large-scale infrastructure projects in Canada, but noted that may be changing. 'We think that there may be the will to actually build some of these things,' he said, referring to big infrastructure projects. The comments by Graham came as the fund reported a net return of 9.3 per cent for its latest fiscal year. The fund totalled $714.4 billion in net assets at March 31, up from $632.3 billion a year earlier. The increase included 59.8 billion in net income and $22.3 billion in net transfers from the Canada Pension Plan. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW The result fell short of its benchmark portfolios' return of 10.9 per cent. CPP Investments holds a global portfolio, of which 47 per cent is invested in the U.S. compared with 12 per cent in Canada. Nineteen per cent of the fund was invested in Europe, 17 per cent in the Asia Pacific region and five per cent in Latin America, as of March 31. Graham said the U.S. portion increased last year as its U.S. assets performed well and the U.S. dollar strengthened versus the loonie. CPP Investments says public equities, especially in the U.S. and China, delivered gains despite geopolitical and trade-related headwinds in its fourth quarter, while investments in private equities, infrastructure and credit also helped. The strengthening of other currencies against the loonie also boosted results. In releasing its annual report Wednesday, CPP Investments dropped a net-zero by 2050 commitment for carbon emissions. It noted that there have been recent legal developments in Canada that have introduced new considerations around how net-zero commitments are interpreted. Recent changes to Canada's Competition Act require companies to be able to substantiate environmental claims they make. Graham said the fund continues to believe in the need to incorporate sustainability in how it manages its portfolio. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW 'We think it is really important to incorporate climate and incorporate sustainability into the portfolio when we take a long-term perspective and as a long-horizon investor,' he said. 'Recent legal developments in Canada have introduced, kind of, new considerations around how net-zero commitments are interpreted so that's caused us to change a little bit how we talk about it, but nothing's changed on what we're actually doing.' This report by The Canadian Press was first published May 21, 2025.
