Dutch civil service scheme ABP said it had almost doubled the proportion of “highly sustainable” investments over the last year, to 8.5% of its €373bn investment portfolio last year.
Half of these investments consisted of real estate that met the highest sustainability criteria of the Global Real Estate Sustainability Benchmark (GRESB), a portfolio that has tripled in scale in 2014, Corien Wortmann-Kool, ABP’s new chair, said during the presentation of the pension fund’s annual report on environmental, social and governance (ESG) investing.
She said that ABP wanted to further raise its sustainability target for investments in companies, but said that it would provide details after the summer.
Wortmann added that the scheme would also present measurable targets for a further increase of the sustainability of its investment portfolio.
The €179bn healthcare scheme PFZW has previously said that it wanted to quadruple its investments to 12% in companies with an important role in improving healthcare, solving water shortage as well as reducing CO2 emissions.
Commenting on pressure groups that wanted ABP to divest from fossil fuels such as coal, oil and gas, Wortmann said that the board took the objections seriously, but that many other participants had an entirely different take on the issue.
“In their opinion, we must deliver proper returns in the first place,” she said.
The chair indicated that ABP would not give in to the demands of these action groups, and that it saw that the role for fossil energy remaining important during the coming decades, despite the ongoing transition to renewable sources.
According to Wortmann, following an investigation into the risks of investments in fossil energy, ABP had already reduced its stake in coal in favour of gas and oil. However, she declined to be specific about which companies the pension fund had divested from.
This week, the €812bn Norwegian Government Pension Fund Global announced that it would divest from all companies which had a stake of more than 30% in the coal sector.
ABP made clear that it wanted to act as a responsible stakeholder, and that it had engaged with more than 200 companies about environmental and social matters, remuneration as well as governance.
Once the engagement process got underway, firms in Europe and the US were granted two years to improve performance, while Asian companies were given three years.
If they fail to act, ABP could decide to sell its stake.