Dutch pension fund ABP has announced plans to invest €10bn in climate solutions and plans to cut companies from its portfolio that are not managing the risks of climate change.
The moves are part of a new policy launched by €500bn ABP today (4 March). The plans aim to tighten the pension fund's criteria on climate and biodiversity themes in its investment portfolio in line with international agreements, such as the Paris Climate Agreement.
As part of the policy, ABP aims to have a total of €30bn allocated to “impact investments”.
Dutch pension scheme aims to invest a minimum of €10bn of these impact investments in climate solutions and at least €1bn in biodiversity solutions. On top of this, €10bn of the “impact investments” will be realised within the Netherlands.
Speaking on the new policy, Harmen van Wijnen, chair of the board of trustees, said: “ABP's investments wield influence on the world, presenting opportunities to make a meaningful societal impact by investing in sustainable and dependable energy solutions and affordable rental housing, including within the Netherlands. This multi-faceted approach ensures that ABP's investments yield dividends for our participants.”
Changes to equity portfolio
Alongside the allocation to “impact investments”, ABP is making changes to its equity portfolio selection, with the fund committing to divest from companies that no longer “align with ABP’s [new] vision” and tightened climate criteria.
This includes no longer investing in companies that are not managing the risks of “climate or biodiversity damage that is inherently linked to their business activities, with no realistic prospect of improvement”.
ABP said it expects companies that have a significant impact on climate to present “concrete plans for reducing emissions in coming years”. The pension fund will implement the new criteria gradually, starting with its equity portfolio in developed markets (valued at €102bn) and will later extend this to other parts of its portfolio.
“Innovation is a timeless imperative for companies in a dynamic economy. They must actively embrace climate policies and contribute to the preservation of nature and biodiversity. This imperative extends to ABP as well, given the profound impact of a changing world on our investments. Effectively managing risks within our investment portfolio is of paramount importance,” Wijnen added.
This comes as ABP divested €15bn from oil, gas and coal investments within its portfolio in the first quarter of 2023 following an announcement in 2021 that it would stop investing in fossil fuel producers.
