(Bloomberg) -- Canada’s Public Sector Pension Investment Board is considering transition and sustainable bond issuance as an option to advance its funding plans.

The pension fund, which is a regular issuer of green bonds, plans to raise 10% of its financing needs via sustainable instruments by 2026, said Renaud de Jaham, managing director and head of treasury at PSP Investments.

“We are thinking of reopening our framework that is dedicated to green bonds to the possibility of sustainable financing,” said de Jaham at London Stock Exchange’s Debt Capital Markets Forum Thursday. “We are thinking about thematic bonds and transition bonds.”

Transition bonds refer to debt instruments that can be used to fund the reduction of a company’s environmental impact. 

Canada has committed to reducing its carbon emissions by 40% to 45% by 2030, from 2005 levels, even though it is the world’s fourth largest producer of oil. PSP, which manages the pension fund of federal workers including the military, last issued green bonds in August when it raised C$1 billion of 2030 bonds, according to data compiled by Bloomberg.

“I do think that PSP is very well placed to play a leadership role in Canada and the rest of the world with regards to sustainable financing,” de Jaham said. “We want to go towards a greener economy in general, it’s a very important aspect to support transition towards a greener economy.”

PSP is one of Canada’s largest pension funds with C$243.7 billion ($180.6 billion) of net assets under management as of March 31, according to its website. 

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