Toronto | Reuters — Canada’s No. 2 pension fund Caisse de depot et placement du Quebec announced plans on Tuesday to completely exit oil production by the end of 2022 and reduce carbon intensity by 60 per cent by 2030.

As part of the same plan to reach net-zero emissions by 2050, Montreal-based Caisse plans to hold green assets worth $54 billion by 2025 and dedicate $10 billion to decarbonize carbon-emitting sectors.

Pension funds globally are under pressure to act on climate change, with several schemes announcing divestments from fossil fuel companies this year.

The new emissions targets for Caisse, which has $390 billion in assets, follow the Ontario Teachers’ Pension Plan Board (OTPP)’s Sept. 16 announcement of new interim plans to cut emissions.

While oil production assets currently make up one per cent of Caisse’s portfolio, the pension fund said it wants to divest it to avoid contributing to growth in global oil supply.

At the same time, it aims to boost the supply of renewable energy, sustainable transportation and real estate and invest in new sectors, such as green hydrogen, batteries, electrification of transport and carbon capture.

Caisse plans to move toward net zero emissions through investments in less carbon-intense assets, carbon budgets for each investment team and bonuses tied to climate targets.

“With this new strategy, we are demonstrating our leadership as an investor and enter the next stage of climate investing,” Charles Emond, president and CEO of Caisse, said in the statement.

“We believe this is in the interests of our depositors, our portfolio companies and the communities we invest in.”

The pension said Tuesday it had exceeded its climate targets, reducing the portfolio’s carbon intensity by 38 per cent since 2017.

— Reporting for Reuters by Maiya Keidan.