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Legal analysis suggests CPPIB not doing enough to transition to lower-carbon assets

September 18, 2020

Is the Canada Pension Plan Investment Board paying enough attention to climate change?

Benefits Canada reports that the Canada Climate Law Initiative has released a legal opinion that raises concerns that the Canada Pension Plan Investment Board may not be making investments that will support the transition to a low-carbon economy. Instead, its investments continue to focus too heavily on high-carbon assets.

Among other things, the legal analysis indicates that the Board’s investment strategy may be inconsistent with the its fiduciary duty. Benefits Canada asked Simon Archer about that claim:

“Like other fiduciaries, pension fund administrators have a duty to consider material risks and return factors in making their investment policies and decisions,” said Simon Archer, pension expert and partner at Goldblatt Partners LPP. “Each year, we get better and better analysis about the risks of carbon assets.

“Today’s report highlights some apparent inconsistencies in CPP Investments’ stated policy objectives in addressing the risks associated with climate change and its expanding portfolio of high-carbon assets. Plan beneficiaries deserve a better explanation of how and when CPP Investments will transition away from these carbon-based assets.”

Simon was also quoted in The Energy Mix.

You can watch Simon Archer comment on the report of the Canada Climate Law Initiative on whether pension funds are doing enough to help transition to a low carbon economy. Simon’s comments start about 33 minutes into the webinar.


Simon Archer

Practice Areas

Pension & Benefits Law