The Netherlands’ largest pension scheme has declared itself on track to invest €58bn in assets linked to the UN’s Sustainable Development Goals (SDGs) by the end of next year.
The €431bn civil service scheme ABP said in its ESG report for 2018 that SDG-related investments grew by €5.7bn to €55.7bn last year, equating to 14% of its entire assets. Its goal for next year is €58bn.
ABP has already exceeded its CO2 emissions reduction goal of 25% relative to 2014. Last year, it had reduced the carbon footprint of its equity portfolio by 28%.
It achieved this by setting stricter requirements for large carbon emitters in its investment universe, as well as easing the restrictions for sectors with limited emissions.
The scheme assessed 7,700 of 10,000 companies for their sustainable credentials, resulting in a better insight into the opportunities and risks of ABP’s long-term investments.
In addition, it has developed additional criteria for excluding companies from its portfolio and added 150 firms to its exclusion list. Last year, it divested from companies involved in tobacco and nuclear arms – banking a €700m profit in the process – and added South Sudan’s government bonds to its exclusion list.
PetroChina, Tokyo Electric Power Company and US supermarket Walmart were all excluded because of violations of the UN’s Global Compact on human rights, the environment, and corruption.
Renewables, green bonds and engagement
ABP’s allocation to renewable energy assets increased to €4.9bn during 2018, the report stated, which was €100m short of its 2020 target. Its holdings in sustainable energy at 2018-end equated to 11% of its energy portfolio.
Last year, the civil service scheme expanded its stake in green bonds by €2bn to €5.5bn. It has now invested in 141 bonds issued by government-related organisations for financing social and sustainable projects.
The report also detailed how the scheme had engaged with Facebook and Apple to prevent the violation of the digital rights of customers, as part of its commitment to improve human rights. ABP also said it had backed the Brooklyn Pledge, which calls on the clothing industry to fight abuses.
However, environmental pressure organisations argued that the pension fund was still on a collision course with the goals of the Paris climate agreement.
Fossielvrij NL, Both ENDS, Urgewald and Greenpeace said that ABP still had €10bn worth of investments in the fossil fuel industry.
Between 2016 and 2018, ABP’s stake in the 44 largest carbon emitters had even increased, they claimed, adding that investments in Russian energy firms Gazprom and Rosneft had doubled and tripled, respectively, last year.