The €152bn Dutch healthcare pension fund PFZW is to increase its sustainable investments fourfold to at least €16bn over the next five years.
Within this period, the pension fund has also committed to reducing the carbon footprint of its entire portfolio by 50%, according to Maurice Wilbrink, spokesman at PGGM, PFZW’s €178bn asset manager.
His announcement followed the signing by PGGM of the Montreal Carbon Pledge, during the annual conference of the Principles for Responsible Investment (PRI).
Wilbrink said PFZW’s sustainability target would consist of “direct investments in green energy and clean technology, sustainable climate-related solutions and investments in food security and against water scarcity”.
The pension fund will also aim to halve the CO2 footprint of its investments before 2020 by comparing companies in each sector and subsequently picking the best performers, he said.
Wilbrink added that the assessments would be made using carbon data available at the companies Sustainalytics and MSCI, complemented with data from South Pole and Trucost.
He stressed that social and financial returns would go “hand in hand”, and that PGGM was convinced sustainable investments would generate sufficient returns for the pension fund.
By signing the Montreal Carbon Pledge, investors committed themselves to measuring and annually publishing the carbon impact of their investments.
Overseen by the PRI, the Montreal Carbon Pledge aims to attract €2.4bn before the UN Climate Change Conference in December 2015.
On Thursday, the UK’s Environment Agency Pension Fund and the Joseph Rowntree Charitable Trust, as well as the US civil service scheme CalPERS, were among the signatories.
The Carbon Pledge also allows investors to formalise their commitment to the goals of a recently introduced Portfolio Decarbonisation Coalition, co-founded by the UN Environment Programme Finance Initiative (UNEP-FI).
According to the PRI, a growing number of investors, including the London Pensions Fund Authority (LPFA), VicSuper, AP4 and Etablissement du Régime Additionnel de la Fonction Publique (ERAFP), has already taken steps to measure the carbon footprint of their investments.
It said 78% of the largest 500 publicly listed companies now reported their carbon emissions.