TORONTO — The Canada Pension Plan Investment Board, the country’s largest pension fund manager, has abandoned its commitment to achieve net-zero emissions by 2050, three years after pledging to scrub its business and portfolio of greenhouse gases. 

The pension fund, which manages over $714 billion in assets on behalf of about 22 million Canadians, attributed the move to “recent legal developments in Canada,” though it did not specify what changes that referred to. 

CPP’s net-zero policy change is buried in the FAQ section of a webpage about its approach to sustainability. “Forcing alignment with rigid milestones could lead to investment decisions that are misaligned with our investment strategy,” it reads. “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 investment giant also referenced the about-face in its 2025 annual report released Wednesday. It said the firm is still pursuing net-zero emissions in its business, but the pace of its transitions away from fossil fuels will now depend on “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,” according to the report. 

The reversal follows amendments to the federal Competition Act made last June, when Ottawa introduced an anti-greenwashing provision. The law exposes companies to legal challenges for making environmental claims that cannot be verified through an “adequate and proper test,” according to the Act. 

Shareholder activism group Shift Action for Pension Wealth and Planet Health called the move “an unacceptable abdication of responsibility.” 

“In backing out of a promise to invest in line with its net-zero by 2050 commitment, [CPP’s] management has failed to undertake its most fundamental purpose—to responsibly manage the long-term collective savings of working and retired Canadians,” reads a statement from Shift senior manager Patrick DeRochie. 

CPP spokesperson Michel Leduc said legal changes were just one reason for scrapping the target. “There is increasing pressure to adopt interim targets, many of which don’t reflect the complexity of global investment portfolios like ours or differentiate between the control that an operating company has over its assets and the limited influence that investors have over the strategy of their investees,” he said in an email to The Logic.

Leduc said the fund’s climate policies haven’t changed, despite eliminating the net-zero timeline. He still expects global emissions to hit zero around the middle of the century. “We can’t pledge when that year will arrive, and it will be nonlinear,” he said, “yet our capital is especially well placed to be part of the world’s goal.”

In 2022, the pension fund manager pledged to eliminate greenhouse gas emissions by 2050. The target is a widely accepted global standard for businesses and investors to meet in order to comply with the Paris Agreement and ultimately help limit global warming to 1.5 C above pre-industrial levels. 

The firm had been a holdout among Canada’s large institutional investors in formally committing to the target, though it said at the time that it had been working toward decarbonizing its portfolio for more than a decade. The fund says the carbon footprint of its portfolio is down 41 per cent since 2020. 

CPP’s move away from a firm net-zero commitment follows a sweeping backlash against sustainable finance in the U.S., including from President Donald Trump and other Republican politicians, who claim the principles don’t align with fiduciary duties. In January, droves of banking and investment giants, including BlackRock, quit global net-zero alliances, citing regulatory and political shifts. Canada’s six largest banks joined the exodus. 

Canada’s largest pension funds have until now held firm on their climate commitments. CPP Investments is so far the only “Maple Eight” pension fund in the country to abandon its net-zero target.