Stichting Pensioenfonds ABP, Heerlen, Netherlands, increased its overall portfolio's carbon emission reduction target to 40% to be achieved by 2025, according to the pension fund's new sustainable policy published Monday.
The €465 billion ($512.6 billion) pension fund has gotten its portfolio's carbon emission reduction target to 30% in the past five years, exceeding its 2015 goal that was set at 25%, an ABP spokeswoman said in a telephone interview. In an effort to meet the new 2025 target, ABP will extend the screening of carbon emissions to additional asset classes such as government and corporate debt through its manager, APG Asset Management, the spokeswoman added.
Under the new policy, ABP also intends to reduce its portfolio's exposure to coal mines and tar sands before 2025.
Currently, an equivalent of €700 million in ABP's overall portfolio is invested in companies that derive their revenues from coal mines and tar sands, the spokeswoman said. ABP will divest those companies that fail to bring their revenues from coal and tar sands to below 30% and 20%, respectively, by 2025.
In an effort to broaden its scope of sustainable investing, ABP on Monday also outlined its plans to increase assets that support the United Nation's Sustainable Development Goals.
ABP will increase investments aimed at achieving these goals to 20% of the portfolio, from 14%, by 2025, as the pension fund will seek out companies with business models aimed at a recycling-based economy and solutions to solve food and natural resource scarcity.
Within SDGs-driven investments, ABP slated €15 billion for clean, sustainable and affordable energy. Currently, ABP invests €6 billion in renewable energy only.
"We are going to invest more in companies that are working on the reuse of raw materials and responsible food production and in companies that are seeking digitization solutions to combat climate change and scarcity of resources," said Corien Wortmann-Kool, chairwoman of the board, in a news release Monday.
