In October 2025, four young Canadians—Aliya Hirji, Travis Olson, Rav Singh, and Chloe Tse—filed a landmark Canadian lawsuit against the Canada Pension Plan Investment Board (CPPIB). Represented by Ecojustice and Goldblatt Partners LLP, the plaintiffs allege that the board has mismanaged climate-related financial risks, breaching its fiduciary duties to act prudently, loyally, and impartially on behalf of contributors and beneficiaries and to safeguard contributors’ retirement savings.

The claim asserts that CCPIB has mismanaged and failed to adequately disclose its climate-related financial risks, and that the lawsuit could set a precedent for how pension funds—and other large institutional investors—must factor climate change into their investment decisions.

What the lawsuit argues

The claim scrutinizes the fund’s climate-risk modelling, asset allocation (including the retention of fossil fuels), and disclosure failures. Specifically, it argues:

• Underestimating climate risk: CPPIB’s internal models reportedly treat climate change as a manageable, minor risk—even in scenarios where global temperatures rise well beyond targets set under the Paris Agreement.
• Fossil fuel exposure in the energy transition: CPPIB continues to allocate capital towards high-carbon exposures, which not only contributes to environmental harm but also increases financial vulnerability in the transition away from carbon-intensive assets.
• Breach of legal duty: CPPIB is breaching its statutory obligation to act in the best interests of its younger beneficiaries by failing to sufficiently address climate-related risks. Plaintiffs argue this isn’t just about investment strategy—it’s about intergenerational equity.

The claimants seek declarations about CPP Investments’ duties and orders for greater disclosure rather than monetary damages.

CCPIB has addressed the accusations in a statement to the Benefits and Pensions Monitor, maintaining that CCPIB “invest to maximize long‑term investment returns without undue risk of loss and manage the CPP Fund in the best interests of CPP contributors and beneficiaries [and] [o]ur 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 Bauslaugh opinion on pension plan fiduciaries

This case speaks to the principles articulated in Randy Bauslaugh’s legal opinion: Climate Change: Legal Implications for Canadian Pension Plan Fiduciaries and Policy-Makers. The alleged failures detailed in the Ecojustice case are what good governance frameworks and decision-useful disclosures are designed to prevent. Bauslaugh makes clear that fiduciaries demonstrate loyalty and prudence through process—by how risks are assessed, modelled, monitored, and disclosed: “[A] fiduciary demonstrates loyalty and prudence by the process through which investment decisions are undertaken and managed.”

If CPPIB cannot show that its climate risk governance is rigorous, credible, and transparent; and if the court accepts that opaque risk models and inadequate governance with respect to climate-related issues amount to a breach of duty, the decision would signal that ignoring climate risk is not just a neutral act, but an active decision that carries liability through breach of fiduciary duty. Bauslaugh states that “pension fund fiduciaries ignore at their peril, the financial risks climate change poses to the investments they have a duty to manage.”

Thus, this litigation moves fiduciaries from asking Have we addressed climate? to the more complex question Have we addressed climate risk well?

The key legal arguments from Bauslaugh in the Ecojustice case include:

1. Fiduciary duty: Climate risk as a core financial obligation

Bauslaugh’s opinion asserts that fiduciaries are not permitted to use pension assets for social aims, but their fiduciary obligations require plan administrators to consider risks that are financially material to plan performance. This includes climate change if it threatens the “financial purpose” of the plan.

The plaintiffs allege that CPPIB’s reported climate modelling “drastically underestimates the financial risks of climate change to the Canada Pension Plan”. They argue that “CPP Investments has failed to address the systemic risks that climate change poses to the broader financial and economic systems, while investing Canada Pension Plan funds in companies and assets whose financial performance depends on the expanded and prolonged use of fossil fuels.”

2. The duty of impartiality: The intergenerational governance failure

Bauslaugh’s opinion explains that the duty of impartiality prevents trustees from favouring the short-term returns of current beneficiaries if doing so undermines the long-term solvency required for younger contributors:

Pension plan fiduciaries must recognize and balance current and future intergenerational risk and return considerations over periods that potentially exceed human lifetimes. The evidence reviewed below indicates that climate change gives rise to both immediate and long term economic and portfolio risk exposures and opportunities, and as a result, triggers a multi-generational oversight approach that unavoidably engages the duty of impartiality.

All plaintiffs expect to retire after 2050, and the lawsuit suggests that by prioritizing short-term gains from high-carbon assets, CPPIB is allegedly undermining the fund’s ability to pay out benefits in 2050 and beyond, thus negating its duty of impartiality.

3. Disclosure as a fiduciary obligation

Bauslaugh emphasizes that disclosure is essential for pension plans:

[A]ppropriate disclosure of climate change management is considered to be a critical governance issue for many plans. The administrator should be satisfied that disclosures are accurate, convey meaningful information, and that the plan’s internal controls and procedures have been designed to detect and deter inaccurate information or variance from the primary financial purpose of taking climate change into account.

This lawsuit argues that CCPIB is “failing to disclose its approach to climate-related financial risks” and that this could impact the retirement benefits payable beyond 2050.

The Canada Climate Law Initiative (CCLI) has advocated for standardized, mandatory disclosures for several years. Our most recent blog When net-zero claims meet regulation: the I4PC complaint to the ASC and Canada’s incomplete climate disclosure architecture emphasizes that “a fragmented and incomplete climate disclosure architecture in Canada, underscoring the need for a ‘whole-economy’ approach to consistent and mandatory climate-related disclosures.”

The Ecojustice case could go either way: conflicting case law

Recent case law in the United States (US) suggests that the outcome of the Ecojustice case may not be certain. Recent conflicting case law in the US demonstrates that ruling on the nature of fiduciary duties with regard to climate can vary (even within the same court). As detailed in CCLI’s recent blog, the American Airlines decision and its impact on climate governance, two cases were heard in the same court, only one month apart, on the issue of Environment, Social and Governance (ESG) investing in retirement plans, and yet, the rulings could not be more distinct from one another.

In State of Utah et al v Micone et al, the Court ruled that Rule 2022 only allows for the consideration of the economic effects of “climate change and other environmental, social, or governance factors” as part of a pension fiduciary’s risk and return analysis, which was not contrary to the Employee Retirement Income Security Act of 1974 (ERISA) duty of loyalty.

Paradoxically, in the Spence v American Airlines Inc case, a month later, the same court ruled that American Airlines had breached its duty of loyalty to act “solely in the retirement plan’s best financial interests” by allowing BlackRock to influence the management of the retirement plan with its ESG objectives.

In Australia, the case McVeigh v Retail Employees Superannuation Trust (REST) was settled outside of court proceedings, with REST agreeing to identify, quantify, mitigate, manage and disclose climate-related financial risk in its management of investment strategies and asset allocation. However,  In the judgment of the cost order, the Court detailed that determining the “duties of superannuation trustees in relation to climate change and their obligation to provide information about the same to their members” was a “ moderately complex case” and that “[a]lthough it is possible that one could characterise this case as one involving the proper construction of … the [Superannuation Industry (Supervision) Act 1993] together with some issues about the duties of trustees and hence as being a dry Chancery suit, I do not think that would be a fair characterisation.”

These judgments in other jurisdictions do not set a precedent for how Canadian courts will rule. However, they demonstrate a dichotomy in how judges perceive pension plan fiduciaries in the context of ESG considerations, emphasizing that the determination of fiduciary duties of pension funds with respect to climate is a complicated topic that can be influenced by a plethora of factors.

Practical recommendations for pension fiduciaries

Drawing on the Bauslaugh legal opinion and the governance weaknesses alleged in the CPPIB claim, pension plan fiduciaries could take immediate steps to reinforce prudence and transparency to avoid the risk of litigation in the future:

1. Clarify financial purpose: Explicitly confirm in investment policies that climate risk integration is for financial purposes, and not for social aims.
2. Examine the investment horizon: Ensure risk assessment timelines reflect the demographic reality of beneficiaries and protect future contributors as rigorously as current retirees.
3. Climate competency of the board and experts: External consultants can support prudence, but cannot substitute for it. Solicit qualified climate expertise and document how the board tested, challenged, and validated that advice.
4. Document the “why”: Prudence is demonstrated by the record of decision-making. Minutes and policies must clearly articulate how climate risks and opportunities were evaluated, what assumptions were used, and why decisions were made.

A precedent in the making

In 2021, the Bauslaugh opinion offered pension plan fiduciaries a roadmap to better plan governance in light of climate considerations. This lawsuit will test whether one of Canada’s most influential pension fiduciaries has built a governance framework capable of managing climate-related financial risk.