The Canadian Climate Law Initiative today released a new opinion by pensions lawyer Randy Bauslaugh, titled Climate Change: Legal Implications for Canadian Pension Plan Fiduciaries and Policy-Makers (the Opinion). The Opinion makes clear that (i) pension fund fiduciaries have a duty to consider climate-related financial risks and opportunities and (ii) failing to do so may lead to personal liability for economic, reputational, or organizational loss. This bulletin briefly summarizes the key findings of the Opinion:

  • Legal responsibilities of plan fiduciaries. Climate change poses immediate and long-term economic and portfolio risks and opportunities that result in the need to take a multi-generational oversight approach. In addition, flowing from the fiduciary’s standard of care and duty of loyalty, climate change is a primary consideration of fiduciaries in advancing the primary purpose of plan fiduciaries: providing periodic payments to individuals after retirement and until death in respect of their service as employees.
  • The financial relevance of climate change to fiduciary investment responsibilities. The financial relevance of climate change is supported by its acceptance by the financial services sector, including bankers, accountants, insurers, investment managers, securities regulators, academics, and public sector organizations, as well as the unequivocal acceptance of the causes and impacts of climate change by all parties in the recent Supreme Court of Canada decision upholding the federal Greenhouse Gas Pollution Pricing Act (read our earlier bulletin here).
  • Must plan fiduciaries consider implications of climate change? The Opinion notes that with the growing consensus around the materiality of climate-related risks and opportunities, failure to take climate change into account may result in a fiduciary facing: 
    • -removal; 
    • -court-ordered disclosure of information related to climate change-related risks; 
    • -fines and penalties under pension standards legislation; and
    • -personal financial responsibility for investment underperformance or loss resulting from failure to properly manage climate change risks and opportunities, including equitable compensation or exemplary damages

Please contact Lisa DeMarco at should you wish to discuss the contents of this bulletin.


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