CPPIB Preparing For A Lower-Carbon Economy

Pension plan issuing green bonds and investing in Chinese tech company.

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omersgrowthThe Canada Pension Plan Investment Board is issuing green bonds with an aim to boost its holdings in renewable energy and efficient buildings.

Over the past year, the pension fund has indicated its intention to put more than $3 billion into the renewable energy sector to ensure it’s ready for the anticipated transition to a lower-carbon economy on a global scale, according to a release.

“The issuance of green bonds is a logical next step to CPPIB’s investment-focused approach to climate change, and we are pleased to be a pioneer amongst pension funds in this regard,” said Poul Winslow, senior managing director and global head of capital markets and factor investing, in a press release.

“The capital raised will help support strong, long-term investments in eligible green assets that position the fund for continued success.”

The three categories defined by the CPPIB as eligible for investment from the proceeds of the green bonds are renewable energies, such as wind and solar power; sustainable water and wastewater management; and green buildings, specifically those that have achieved Leadership in Energy and Environmental Design platinum certification.

In another investment move, the CPPIB is putting about US$600 million into Ant International Co. Ltd., a subsidiary of Chinese technology company Ant Financial Services Group.

Since its 2004 launch of Alipay, a third-party mobile and online payment platform, the technology company has built a platform to bring more secure, transparent financial services to people and businesses globally, according to a press release, which noted it would continue to invest in developing blockchain, artificial intelligence, security and computing capabilities.

In the year ended March 31, 2018, Alipay served about 870 million annual active users globally and more than 15 million small businesses in China.

“China’s growing online financial market presents meaningful opportunities for leading participants like Ant Financial,” said Suyi Kim, senior managing director and head of Asia Pacific at the CPPIB.

“Through this investment, CPPIB is able to contribute to Ant Financial’s efforts to provide a full-range of products and services to empower financial institutions and other partners both globally and in China, where it will further transform financial systems through innovation in technology.”


This story was originally posted on benefitscanada.com.

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