Stichting Pensioenfonds ABP, a 502-billion-euro ($545 billion) pension fund serving Dutch educators and government employees, announced on Monday a goal to allocate 30 billion euros in investments by 2030 to impact themes such as climate solutions, affordable housing, sustainable energy and innovation.
In addition to the impact investments, the pension fund expects to review its investment in all companies as it creates a “basket” of investible companies managing the global risks ABP has identified and meeting “ABP’s minimum standards.”
“ABP identifies climate and biodiversity as the key themes influencing societal and economic changes, presenting risks and opportunities in the investment portfolio,” fund officials wrote in an announcement of the new investment plans. “Respecting human rights and good governance are also crucial themes for the fund. In the new investment policy, ABP sets goals and tightens criteria on these themes in the investment portfolio in line with international agreements, such as the Paris Climate Agreement and the Kunming-Montreal Biodiversity Agreement.”
The pension fund previously committed to a net-zero initiative in 2021, pledging to reach a net-zero investment portfolio by 2050 or earlier.
Impact Investing
Of the 30-billion-euro commitment, the fund expects to allocate 10 billion euros to impact investments focusing on affordable housing, sustainable energy and innovation. The fund also plans to allocate 10 billion euros to climate related investments and another billion euros to biodiversity solutions. According to ABP, 10 billion euros of investment will be made within the Netherlands.
The fund’s announcement stressed that the investment strategy must also deliver strong returns. “ABP aims to have investments generate double returns more frequently through impact investing,” the fund officials wrote. “There is a strict definition for these investments, requiring a fitting financial return combined with a measurable contribution to positive social and environmental impact.”
Equity Investments
The fund announced it will exclude holdings of companies whose business operations contribute to climate or biodiversity damage. The fund also plans to shift its equity portfolio to a basket of companies that align with ABPs standards.
“To provide its participants with a secure pension in a livable world, ABP must engage in sustainable and responsible investing,” the announcement stated.
ABP expects companies in its equity portfolio to present plans to reduce emissions in the near future. According to the fund, it will gradually adapt requirements and standards for companies it holds in the equity portfolio. These standards were implemented in December 2023 in the fund’s 10- billion-euro developed markets equity portfolio and will be expanded throughout the entire equity portfolio.
“ABP aims to implement this carefully and thoughtfully, taking the first step now and then assessing whether it can and should progressively impose stricter criteria based on the experience gained,” the announcement stated.
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Tags: ABP, Impact Investing, Netherlands, Stichting Pensioenfonds ABP