The Netherlands’ central bank and pensions regulator DNB has announced it will bring its €9bn investment portfolio in line with the Paris Agreement. DNB will halve the carbon footprint of its investments by 2030 in the process.

With the step, DNB aims to make “a positive contribution to a carbon-neutral economy”, its head of sustainable investing Rianne Luijendijk said in an interview on the regulator’s website.

According to Luijendijk, achieving a good return and making impact are now equally important. In recent years, DNB has been urging pension funds to better monitor climate risks.

DNB has now introduced a Paris Aligned Benchmark (PAB) for all its listed investments, meaning the bank will no longer invest in fossil fuel firms.

DNB will also avoid companies that violate the UN’s Global Compact principles or the EU’s Do No Significant Harm principles, while also excluding investments in tobacco and controversial weapons.

“Since 2023, we have been aiming our investments explicitly at CO2 reduction and we only invest in companies that take demonstrable steps to reduce their emissions,” said Luijendijk.

New managers

The regulator is still in the process of implementing the new strategy. In June this year, it launched a first listed equity mandate with explicit CO2 reduction goals.

“We are striving to appoint new asset managers before the end of 2024 so we can set up two additional mandates in line with the Paris Agreement,” DNB said.

The bank has also hired a specialised voting and engagement manager that will start dialogues with the companies in its equity portfolio. Outsourcing voting to an external manager “fits with the independent position of DNB,” a spokesperson told IPE.

DNB declined to name the manager in question, but said the firm has “a lot of experience in sustainable investing”.

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