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INVESTING/PORTFOLIO STRATEGIES

Austria’s largest pension fund moves equity portfolio to low-carbon indexes

VBV-Pensionskasse, Vienna, reduced the carbon intensity of its equity portfolio by 55% since the beginning of the year, said a spokeswoman.

Austria's largest pension fund, which has €6 billion ($6.5 billion) in assets, reallocated its €850 million passive global equity strategy's benchmark to MSCI's low-carbon indexes from MSCI Standard indexes.

The change means the pension fund is now investing in companies with a carbon output below 100 tons of carbon dioxide per 1 million in sales, compared to 220 tons before the switch.

“A few stocks are no longer part of the universe, but dropped out at the low end because of reduced weightings,” the spokeswoman added.

"(We) believe that the carbon footprint of investments and appropriate decarbonization strategies for capital investments are landmark issues that reach far beyond the pension fund sector," Guenther Schiendl, VBV's head of investments and member of the board, said in a news release.

"In the interest of our customers and with our responsibility for the location in mind, we have decided to send out a signal and hope there will be a knock-on effect among the companies we share the market with," Mr. Schiendl said.