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Canadian pension fund PSP Investments will reduce its greenhouse gas emissions assets by 25% by 2026

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TORONTO, June 9 (Reuters) – Canada’s Public Sector Pension Investment Board (PSP Investments) said on Thursday it planned to reduce its exposure to greenhouse gas (GHG) emitting assets 20-25% over the next four years as part of its new climate strategy.

The pension fund will also increase its investments in various shades of green assets and will have an allocation for transitional assets.

“We anticipate that by executing our climate strategy, we will be able to achieve GHG asset reduction by 2026,” said Neil Cunningham, CEO of PSP Investments.

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PSP Investments manages C$230.5 billion ($182.43 billion).

The announcement comes even as other major Canadian pension funds remain firm on their plans to stay invested in carbon-intensive assets.

For example, the Canada Pension Plan’s largest pension fund by assets under management said in May it would continue to invest in fossil fuels and help companies transition to their net-zero goals. .

PSP will increase its investments in green assets from C$40.3 billion to C$70 billion by 2026 and will also reduce its holdings of carbon-intensive assets by 50% without any transition plan.

PSP Investments plans to achieve its climate strategy goals by increasing its percentage of green assets in hopes of reducing its GHG emissions per dollar invested.

The fund generated an 8.9% annualized return on investments last year. Although the one-year capital markets return was 3%, the pension fund is betting on its diversified portfolio of infrastructure and real estate assets which Cunningham says have helped it navigate high volatility in interest rate and supply chain in the market.

On the new asset class such as cryptocurrency, PSP Investments said that although the investment team regularly studies the asset class, there are still unknowns that have prevented the pension fund from investing. .

($1 = 1.2635 Canadian dollars)

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Reporting by Divya Rajagopal in Toronto Editing by Matthew Lewis

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