APG, the largest pension asset manager in the Netherlands, has recruited a meteorologist to bolster its understanding of physical climate risks.
According to a spokesman for APG, the asset manager had also been looking for someone who had data expertise to structure climate data for the purpose of applying it in the investment process.
“Over time we are also looking to use this expertise for broader nature-based topics,” the spokesman added.
He said the new recruit “has a background in climate science and meteorology, and experience in applying this knowledge in a financial process”. “As such, we are very excited that he will join us,” he added.
APG will not reveal the recruit’s identity before he starts at the beginning of September.
Joost Slabbekorn, senior adviser, responsible investment at APG, revealed the appointment in an interview with Dutch pension publication Pensioen Pro about the report from the Intergovernmental Panel on Climate Change (IPCC) earlier this month.
He said the report was mainly about the physical consequences of the increase in carbon dioxide and other greenhouse gases in the atmosphere, and that APG would be delving further into those physical consequences “because they affect many of our investments”.
“Soon our team will be expanded with a meteorologist, and he will probably take all those reports,” Slabbekorn added.
Reacting to the IPCC report on the day of its publication, Inevitable Policy Response (IPR), a project aimed at preparing institutional investors for the risks and opportunities associated with acceleration in global climate policy, said the IPCC report showed it was critical that institutional investors now considered physical climate risks and industry transition risk side by side, rather than seeing physical risks as less immediate.
According to the IPCC, averaged over the next 20 years, global temperature is expected to reach or exceed 1.5°C of warming since 1850-1900. The panel said its report projects that in the coming decades climate changes will increase in all regions and that for 1.5°C of global warming, there will be increasing heat waves, longer warm seasons and shorter cold seasons.
It is not clear just how novel a recruitment APG’s meteorologist appointment is. Asked if Norges Bank Investment Management, the manager of Norway’s sovereign wealth fund, had such a person on their team, a spokesperson told IPE: “We have lots of competencies, but not that. At least not yet.”
More detail about physical consequences
Asked what investors could do with the information in the IPCC report, Slabbekorn told Pensioen Pro that it described in more detail the physical consequences of global warming, also providing information about the chance of extreme weather conditions.
”This information helps investors identify risks,” he said. “In concrete terms, this applies to direct real estate.”
Slabbekorn also said the IPCC report provided information for investors to “recalibrate” their climate policies, adding that ABP, APG’s main client, had already planned to tighten up its policy next year.
In June the civil service scheme committed to the Net-Zero Investment Framework developed by an asset-owner led initiative under the auspices of the Institutional Investors Group on Climate Change, saying that it would help the pension fund “on our pathway to an effective net zero investment strategy”.
This IPCC report that was released this month is the first part of a set of reports that together form the “Sixth Assessment Report”. The next working group report will be focussed on impacts of climate change, adaptation, and vulnerability.
This article was updated after publication to include a comment from NBIM.