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HomeMarketCanada's PSP fund to double issuance of long-term green bonds By Reuters

Canada’s PSP fund to double issuance of long-term green bonds By Reuters

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TORONTO (Reuters) – Canada’s Public Sector Pension Investment Board (PSP Investments) aims to more than double the C$1 billion ($749 million) value of sustainable bond issuance by 2026, an official at the pension fund told Reuters on Thursday.

The pension scheme, which manages C$230.5 billion in assets, issued its first-ever green bond in February this year as part of its goal to reach net-zero emissions.

Several other pensions including Ontario Teachers’ Pension Plan (OTPP), Caisse de dépôt et placement du Québec and the Canada Pension Plan Investment Board (CPPIB), have also issued green bonds.

Neither OTPP, CPPIB nor Caisse have set targets for green bond issuance.

“We want to steer at least 10% of our long-term debt financing towards sustainable goals, so we’re working on that,” Herman Bril, head of responsible investment at PSP Investments, said in an interview.

PSP currently invests 4.2% of its capital debt in green bonds.

PSP, Canada’s fifth-largest pension investment manager, also increased its exposure to green assets by C$6.12 billion to C$46.5 billion in 2022, it said in a report released on Thursday.

As large financial institutions come under pressure from activist groups and regulators over their exposure to fossil fuel assets, the Canadian pension funds have been looking to strike a balance between investor returns and exiting from carbon-generating assets.

PSP has said it will cut its exposure in greenhouse gas (GHG) emitting assets by 20-25% by 2026 as part of its new climate strategy.

($1 = 1.3387 Canadian dollars)

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