Canadian pension fund PSP Investments to cut greenhouse emission assets by 25% by 2026
By Divya Rajagopal
TORONTO (Reuters) – Canada’s Public Sector Pension Funding Board (PSP Investments) mentioned on Thursday it expects to chop its publicity in greenhouse fuel (GHG) emitting belongings by 20-25% within the subsequent 4 years as a part of its new local weather technique.
The pension fund will even improve its investments in numerous shades of inexperienced belongings and have an allocation for transition belongings.
“We anticipate that by executing our local weather technique we can obtain the discount in GHG belongings by 2026,” mentioned Neil Cunningham, CEO PSP Investments.
PSP Investments has C$230.5 billion ($182.43 billion) underneath administration.
The announcement comes at the same time as different massive Canadian pension funds stay agency on their plans of staying invested in carbon-intensive belongings.
For instance, the Canada Pension Plan’s largest pension fund by belongings underneath administration mentioned in Might it is going to proceed to remain invested in fossil fuels and help firms in transitioning towards their web zero objectives.
PSP will improve its investments in inexperienced belongings from C$40.3 billion to C$70 billion by 2026 and also will lower its holdings of carbon-intensive belongings with none transition plans by 50%.
PSP Investments expects to succeed in its climate-strategy targets by boosting its proportion of inexperienced belongings in hopes of decreasing its GHG emissions per greenback invested.
The fund generated an 8.9% annualized return on investments final 12 months. Although the capital markets return in a 12 months has been 3%, the pension fund is betting on its diversified portfolio of infrastructure and actual property belongings which Cunningham mentioned has helped it navigate the excessive interest-rate and provide chain volatility available in the market.
On the newer grade of belongings reminiscent of cryptocurrency, PSP Investments mentioned that though the funding group is commonly finding out the asset class, there are nonetheless unknowns which have saved the pension fund from investing.
($1 = 1.2635 Canadian {dollars})
(Reporting by Divya Rajagopal in Toronto; Modifying by Matthew Lewis)
