How PSP Investments is moving towards a greener economy
Canada's Public Sector Pension Investment Board (PSP Investments) is exploring the possibility of incorporating transition and sustainable bonds into its financing strategies.
PSP, a regular issuer of green bonds, aimed to secure 10% of its financing through sustainable instruments by 2026, according to Renaud de Jaham, managing director and head of treasury at PSP Investments.
“We are thinking of reopening our framework that is dedicated to green bonds to the possibility of sustainable financing,” de Jaham said at the London Stock Exchange's Debt Capital Markets Forum, as quoted by Bloomberg. “We are thinking about thematic bonds and transition bonds.”
Transition bonds are financial tools designed to fund initiatives that reduce a company's environmental impact. Canada has committed to a 40% to 45% reduction in carbon emissions by 2030, despite being the world's fourth-largest oil producer.
PSP, responsible for managing the pension fund of federal employees, including the military, recently issued green bonds in August, raising $1 billion for 2030 bonds, as reported by Bloomberg.
“I do think that PSP is very well placed to play a leadership role in Canada and the rest of the world with regards to sustainable financing,” de Jaham said. “It’s a very important aspect to support transition towards a greener economy.”
With $243.7 billion in net assets under management as of March 31, PSP remains one of Canada's largest pension funds.
