ABP, the €345bn pension fund for Dutch civil servants, is to introduce a “carbon budget” for asset managers as a means of cutting equity-holding CO2 emissions by 25% over the next five years.
Speaking at the climate summit in Paris, José Meijer, the scheme’s vice-chair, said ABP would add the carbon budget to the financial target and risk budgets for asset managers.
By reducing ABP’s carbon allowance annually, the scheme hopes to encourage asset managers to tackle carbon emissions at polluting companies, as well as prioritise investments in “clean” companies.
Meijer said ABP would redouble efforts to engage with companies that had the potential to increase their sustainability significantly.
She made clear, however, that the scheme would still divest holdings if engagement ultimately failed.
At present, ABP has approximately €100bn invested in listed companies.
Meijer reiterated that the scheme wanted governments to follow “stable policies” for the long term.
“We want a pleasant and liveable world for our participants,” she said, “and this requires measures against climate change.”
She called for the abolition of government subsidies for fossil-fuel energy, as well as a more effective means of pricing carbon.
She also demanded “fair competition” between fossil and renewable energy.
“Only then can we invest a larger share of Dutch pension assets in a way that counters climate change and contributes to a better world,” she said.
ABP recently announced that, over the next five years, it plans to double its current €29bn stake in companies providing “solutions” to social and environmental problems, such as water scarcity, flooding, commodity shortages and waste processing.
This commitment includes a fivefold increase in sustainable-energy investments to €5bn.