A $470 billion pension fund is set to issue its inaugural green bond, providing additional funding to increase its own green holdings.
Claiming to be the first pension fund to do so, the Canada Pension Plan Investment Board (CPPIB) described the issuance of green bonds as a logical next step in its investment-focused approach to climate change.
CPPIB's senior managing director and global head of capital markets and factor investing, Poul Winslow said: "We are pleased to be a pioneer amongst pension funds in this regard. The capital raised will help support strong, long-term investments in eligible green assets that position the fund for continued success."
The green bond will form part of CPPIB's broader plans to invest about $4 billion into renewable energies as a means of positioning itself for the anticipated global transition to a lower-carbon economy.
Having developed a Green Bond Framework for the project, the CPPIB defines three categories as eligible for investment using the proceeds of green bonds.
Those categories are renewable energy (both wind and solar); sustainable water and wastewater management; and green buildings (LEED Platinum certified).
CPPIB will seek second opinions on the qualification of debt for green bond status from the Centre for International Climate Research.
The green bond, and any other issued by the CPPIB, will be on a private placement basis and only to certain qualified and accredited investors.