Dutch civil service scheme ABP wants to halve the direct emissions from its total investment portfolio compared to 2019. Divestments of companies that do harm to the climate should help the fund to reach this goal.

Gode Wind Offshore

ABP’s climate goal is a tick more ambitious than that of PME, which also announced a new climate policy recently. The fund for the metals and electronics industry has only promised to halve emissions of its listed investments, while ABP’s target encompasses its entire portfolio. Halving total emissions is necessary to keep the goal of a maximum global temperature rise of 1.5 degrees in sight, according to ABP.

ABP has opted for an absolute reduction target, in contrast to others including healthcare scheme PFZW that prefer a softer, relative target. According to an ABP spokesperson, an absolute target is simply a necessity. “Global emissions have to come down. With a relative measure, you correct for a company’s value or its revenues. An absolute target is better fitted to this challenge,” according to ABP.

Transition risk

ABP, which is currently in the process of selling all its fossil fuel holdings, only wants to remain invested in companies “that also in the long term fit in a sustainable economy,” said Dominique Dijksterhuis, responsible investment executive at the scheme. The fund is currently identifying other sectors “where the business model is based on transferring negative effects on society,” a spokesperson added. “These companies run a great transition risk: if legislation were to force these firms to operate in a sustainable way, they would be hit hard. The risk to remain invested in such companies is too big, especially on the long term.”

According to the spokesperson, ABP is currently developing “instruments” to implement its new policy. But one things is clear: ABP will exclude more firms in the future. “We will concentrate our investments more. Our investable universe will certainly shrink,” the spokesperson said.

€30bn in impact

As part of its new climate plan, €460bn ABP wants to double its investments in the energy transition to €30bn in 2030. Of this, €10bn must consist of “investments that are made with the purpose to have a positive and measurable impact on the world,” ABP said in a press release. These include “investments in sustainable energy sources such as solar and wind, investments in smart networks, home isolation, (green) hydrogen, clean mobility and energy storage.”

Two thirds of members want to invest sustainably

According to a survey that was completed by more than 900 ABP members, two thirds of members said find it important for ABP to invest sustainably and responsibly. Members are split, however, on the question whether investing sustainably also improves returns. They are similarly divided on the question on which themes ABP should concentrate its sustainable investments. Of the 13 themes that were put to them, only renewable energy (51%) gets a majority of votes from members. Of these 13, they were asked to choose five . The theme animal welfare (17%) is the least popular of those. ABP members do, however, urge ABP to find impact investments in the Netherlands. On average, some six out of 10 of these investments should be local, according to the membership.