APG makes new step towards carbon neutral investment portfolio

Published on: 29 March 2021

APG is joining the Net Zero Asset Managers initiative (NZAM). The NZAM is a group of international asset managers committed to reach net zero emissions by 2050 or sooner. The initiative has a total of 73 signatories representing $32 trillion in assets under management, amounts to 36 percent of total assets across the globe. 

 

Specifically, APG promises to work in partnership with its clients on decarbonization goals, consistent with an ambition to reach net-zero emissions by 2050 or sooner across all assets under management; set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner; and review this interim target at least every five years, with a view of ratchetting up the proportion of assets under management covered until all assets are included.

“APG on behalf of pension fund clients, is committed to contributing to the goal of the Paris agreement to keep global warming limited to 1,5 degrees,” says Peter Branner, Chief Investment Officer (CIO) of APG Asset Management. “The Net Zero Asset Managers initiative is completely in line with this ambition, which is why we are pleased to join the group. I am thrilled to see how our investment teams continue to identify climate-related investments in all regions in which we operate. It is encouraging in its own right and comforting for our clients to see that this happens without compromising return objectives.”

The Net Zero Asset Managers initiative is a group of international asset managers committed to reach net zero emissions by 2050 or sooner. Launched in December 2020, the initiative has rapidly grown and now has a total of 73 signatories representing $32 trillion in assets under management. This represents 36 per cent of total assets across the globe. 

APG’s pension fund clients already have climate-related targets for 2025, such as investing in clean and affordable energy (ABP: €15 billion) and reducing the carbon footprint in listed equities. Starting with the 2020 reporting cycle, APG and its clients will extend the scope of the carbon footprint disclosures to include corporate bonds, real estate and private equity. Together, these asset classes represent over half of our assets under management. The objective is to allow clients to set 2030 Paris-aligned climate targets no later than 2022.

We also actively partner with the broader investment community to share insights on climate-related risks and measurement. APG co-chairs the Net Zero Investment Framework (NZIF) which offers practical guidance for investors to align their portfolios with the Paris climate goals. Among other things, the framework defines principles and thresholds for targets on decarbonizing investment portfolios and investing in climate solutions. APG is also a founding member of the Partnership for Carbon Accounting Financials (PCAF). The goal of PCAF is to arrive at a shared methodology to enable financial institutions to assess and disclose the carbon emissions of their loans and investments.

APG’s commitment to net zero emissions in 2050 goes beyond merely reducing the carbon footprint of the investment portfolio, says Joost Slabbekoorn, senior responsible investment specialist at APG. “As a large investor, we have a broad set of tools at our disposal to drive lower emissions in the real world. This includes engagement, also together with other investors, to encourage companies we invest in to reduce carbon emissions and investing in climate solutions, such as renewable energy and carbon saving technology.”