CPP Investments Expands Climate Portfolio Disclosure

• CPP Investments has introduced new carbon intensity and transition governance metrics across its C$787 billion investment portfolio.
• At March 31, 2026, 86.7% of the portfolio sat below its 40 tCO₂e/$M EVIC carbon intensity threshold.
• The pension investor will publish the metrics annually, but will not set fixed portfolio-level targets for the disclosed categories.

Toronto-based Canada Pension Plan Investment Board has expanded its climate disclosures, adding portfolio-level indicators for carbon intensity and corporate transition governance.

The new framework gives investors a point-in-time view of how CPP Investments’ holdings compare across two climate-related dimensions. It builds on portfolio carbon footprint reporting that the fund has published since 2018.

The additional disclosure covers CPP Investments’ C$787 billion investment portfolio as of March 31, 2026, excluding government-issued securities.

“Our investment strategy remains focused on delivering long-term value to help ensure the Canada Pension Plan’s financial sustainability for many generations. We consider material risks, including climate-related risks and opportunities, to support risk-adjusted returns over decades. We know that progress towards a lower-carbon future will not be linear, and we are committed to continued transparency as we invest across sectors and work with companies to reduce risk and preserve value,” said John Graham, President & CEO, CPP Investments.

Measuring carbon intensity across the portfolio

CPP Investments measures carbon intensity using Scope 1 and Scope 2 greenhouse gas emissions relative to enterprise value.

The methodology uses the Partnership for Carbon Accounting Financials metric of tonnes of carbon dioxide equivalent per $1 million of Enterprise Value Including Cash.

CPP Investments established a threshold of 40 tCO₂e/$M EVIC. Its analysis draws on S&P Global LargeMid Cap data, industry classifications and definitions from the International Energy Agency and Transition Pathway Initiative.

The threshold is designed to help identify assets in harder-to-abate industries or those with elevated carbon intensity.

CPP Investments cautioned against treating the threshold as a definitive climate risk classification. Companies below it may still have significant emissions or transition risk. Those above it are not automatically considered high-risk investments.

At March 31, 2026, 86.7% of the portfolio was below the threshold.

Transition governance becomes a second indicator

The framework also assesses whether portfolio companies show evidence of transition governance and planning.

Companies are classified as “Confirmed” when they meet at least one of three criteria. These include approved Science Based Targets initiative targets, a Transition Pathway Initiative Level 4 or 5 rating, or participation in CPP Investments’ Decarbonization Investment Approach.

Among investments classified as having confirmed evidence, 83.5% were covered through SBTi or TPI indicators. CPP Investments’ own Decarbonization Investment Approach accounted for the remaining 16.5%.

Holdings without confirmed evidence are classified as “Unconfirmed.” That category can also include companies where external data is unavailable or an assessment has not yet been completed.

“CPP Investments’ investment approach continues to be grounded in disciplined underwriting, active ownership and a belief that the transition to a lower-carbon economy will unfold unevenly across sectors and regions. Because companies will respond differently to these changes, this disclosure provides additional transparency into carbon intensity and transition governance indicators across our portfolio of assets while remaining consistent with our mandate and climate change principles,” said Richard Manley, Chief Sustainability Officer, CPP Investments.

CPP Investments plans to disclose the indicators annually alongside its existing portfolio carbon footprint.

Source : esgnews.com

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