The German government has selected the Euronext V.E ESG World 75 Index as a benchmark for investments of its public pension and social security funds.
The government has opted to invest pension assets benchmarked to sustainable indices as part of its sustainable finance strategy, as revealed in May.
The plan is to invest assets of four pension and social security funds in equities through two sustainable indices applying the EU Climate Transition Benchmark, it said.
One of the two indices selected at the time was the ESG Eurozone 60 Bund-SV Index designed by S&P to weight sustainable investments.
Two of the four funds adopting the Euronext index include the Versorgungsrücklage des Bundes serving to relieve public finances from future federal pension expenses, and the Versorgungsfonds des Bundes, a special fund created in 2007 to finance part of pension expenses for civil servants, judges and professional soldiers.
The other two special funds are the fund of the Federal Employment Agency and a fund to stabilise contributions for care insurance in the long term.
All four funds will gradually move equity investments to sustainability indices to cut greenhouse gas emissions in their portfolios. The investment volume is around €9bn.
The Euronext index was developed by V.E, a Moody’s affiliate providing ESG solutions for investors, and its partner rating agency imug rating. It tracks 75 companies in six countries outside the euro zone for equity investments.
It selects the best performing stocks in terms of ESG with a robust diversification based on geography and sectors that help implement the goals of the EU Climate Transition Benchmark to reduce greenhouse gas emissions.
Allianz joins net-zero insurance alliance
Allianz has joined a group of insurance companies forming the Net-Zero Insurance Alliance (NZIA) under the guidance of the United Nations. The other allaince members include AXA, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group.
The insurers are putting their weight to contain climate change in line with the target of 1.5°C set by the Paris Agreement.
Allianz is also chairing the Net-Zero Asset Owner Alliance managing a combined €6.6trn in assets and committing to decarbonising its portfolios. The firm is also a signatory of the UN Principle for Sustainable Insurance (PSI).
Oliver Bäte, chair of the management board at Allianz, said the insurance company “wants to accelerate” the transition to a “1.5°C economy”.
He added: “By integrating net-zero targets into both our insurance and investment business activities, we can support our clients to adapt to low-carbon business models.”
Asga adopts climate policy
Asga Pensionskasse, the Swiss provider of occupational pensions for small and medium-sized companies, has adopted a climate policy, which has three main pillars including managing climate risks and excluding coal companies, reducing CO2 emissions to meet Paris Agreement goals, and engaging with companies by actively exercising voting rights as a shareholder.
Asga monitors transition and physical risks resulting from climate change as part of its overall risk management activity. Risks are measured using the MSCI’s Climate Value at Risk model for equities and bonds.
The pension fund will contribute to the reduction of CO2 emissions gradually starting with foreign equities. It will cut CO2 intensity by 5% per year based on the Net Zero Asset Owner Alliance’s requirements, it said.