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TORONTO, also May 19 (Reuters) - The Canada Pension Plan Funding Board will maintain investment in the fossil fuel industry even as it seeks to meet its sustainability goal, CEO John Graham said on Thursday, adding that the fund is “cautiously confident” about market returns due to the Russia-Ukraine conflict, pandemic and supply chain considerations.
Canada's largest pension fund, called CPP Investments, will now not exit energy companies on their way to net-zero goals, but will instead fund companies to help them transition against net-zero desires, it said. Graham.
“Now we cannot follow a path towards general disinvestment. We will continue to invest in energy, oil and gas and hard-to-abate sectors with the goal of being an active and engaged investor,” Graham said in an interview.
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CPP, which had C$539 billion ($420 billion) under management at the end of March, has set an intention to achieve net-zero gasoline greenhouse emissions by 2050 for its portfolio agencies and its own operations.
About C$ 26 billion of CPP's cash is in sustainable energy through private equity investments.
CPP Investments manages pensions for 21 million Canadians.
is carefully analyzing inflationary trends, and Graham said the fund is banking on its diverse investment portfolio to protect retirees from unstable international markets.
CPP delivered an internet return of 6.8% in the remaining fiscal year and generated a return of 11% over a decade. Investments in real assets such as infrastructure, real property and equities have helped the company achieve a “plant-based hedge” from inflationary pressures, Graham said.
CPP said it has no direct investments in Russia, simply “passive, oblique” investments via public markets. “They may also have some publicity for Russia. However, it is the management team and board of directors of these agencies that are working out what to do,” said Graham.
despite the Indian market providing lower returns this fiscal year, Graham said the CPP is still “advantageous for investing in India”.
($ 1 = 1.2823 Canadian dollars)
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Reporting using Divya Rajagopal editing via Denny Thomas and Chris Reese
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