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PFZW demands ‘change in mentality’ over carbon emissions approach

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The €178bn pension fund for the Dutch health and welfare sector, PFZW, has said it wants to bring about a change in mentality over the pension sector’s approach to carbon emission management.

The second-largest Dutch scheme recently overhauled its investment management with a new set of 11 principles to govern its approach, including a halving its ‘negative sustainability footprint’ and a creating systematic integration of sustainability in its investment process.

Speaking in the June issue of IPE, head of investments Jan Willem van Oostveen said PFZW’s €55bn listed equity portfolio, with a carbon footprint of 1.2m tonnes, was a good place to start.

However, he conceded it was difficult  to assess in other asset classes, but that the fund needed to assess its carbon exposure across all investments, including within its €21bn credit portfolio and €36bn private market investments.

“What we want is a change of mentality in the industry, but this is not a goal in itself. It should lead to a more sustainable world.

“In that way, we are agnostic about the way we measure emissions, but the plan should be workable and lead to a change in behaviour,” Van Oostveen said.

“In infrastructure, there is a lot to do, and in real estate we have already been working with carbon emissions for years. We have a structure in which managers report to us, so this looks like the easier investment category.”

Van Oostveen said he remained agnostic on implementing a carbon cap or target for carbon emissions, but that the industry should be capable of creating a workable standard.

In September 2014, the pension fund’s fiduciary asset manager, PGGM, signed up to the Montreal Carbon Pledge, as PFZW set about achieving its new goals by 2020.

It vowed to quadruple its sustainable investments via a series of direct investments in green energy, clean technology and sustainable climate-related solutions.

It will also compare companies in each industry and sector, subsequently picking the best performer with regards to CO2 emissions, via data from Sustainalytics and MSCI.

Click here to read Liam Kennedy’s interview with PFZW director Peter Borgdorff and Van Oosterveen in June’s How We Run Our Money

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