Investments in low-carbon activities leading to positive environmental impacts make up 16.2 per cent of the Public Sector Pension Investment Board’s total assets under management, according to a new report by PSP Investments.
A report reviewing the investment organization’s sustainability progress found its current green assets represent $48.9 billion. It credits its ‘green asset taxonomy’ tool for improving transparency and promoting market convergence.
According to Deborah Orida, president and chief executive officer at PSP Investments, the pursuit for accountability in sustainability has led the team to put in place a plan to support a transition to net-zero emissions by 2050. “We firmly believe that by improving our climate investing capabilities, we can position ourselves to better manage our risk, discover new investment opportunities and increase the resilience of our portfolio.”
The report noted PSP Investments has achieved its target of increasing investments in transition assets to $7.5 billion, representing 2.6 per cent of its total assets under management, ahead of its 2026 target. It defined transition assets as those in the path to “make a substantial contribution to the low-carbon transition through the establishment of public targets and disclosure practices,” noted the report.
Eduard van Gelderen, senior vice-president and chief investment officer at PSP Investments, said he wants his team to “apply the same rigour to sustainability-related analysis as to traditional financial analysis,” while increasing the overall accountability within the investment rationale of sustainable options.
In terms of reducing exposure to negative assets, from an environmental perspective, the report noted PSP Investments has reduced its holdings in carbon-intensive assets without transition plans by 50 per cent compared to its portfolio in 2021. In fiscal 2023, the investment organization also joined the Climate Engagement Canada initiative to engage in discussions promoting the transition to a net-zero economy.
“A strong focus on materiality enables us, as investors, to better understand the potential impact of sustainability-related factors on financial performance and to make informed investment decisions that support long-term value creation,” said Herman Bril, managing director and head of sustainability and climate innovation at PSP Investments, in a press release.