Investing in fossil energy: for how long? That was one of the themes during the investor panel at BRN Zakendoen this week. According to Thijs Knaap, senior strategist at APG Asset Management, it is neither realistic nor sensible for a pension fund such as ABP (with APG as administrator) to leave fossil fuels in the short term. Because: "It is better to have a Dutch pension fund at the table than a shareholder who is less concerned with the environment."
Moreover, it is also unrealistic for economic reasons. 80 percent of the economy obtains energy directly or indirectly from those fossil fuels. We are in a transition to something that is not yet there. "Should you stop investing in airports, trucks?"
Knaap emphasized that ABP listens very carefully to the participants. “We share the concerns. ABP has a solid sustainable investment policy. And everyone has the same long-term goal: a climate-neutral economy.”
The comparison with the divestment of 4 billion euros in fossil fuels recently announced by the PFZW pension fund is flawed, says Knaap. “That is about futures trading. Not about stocks. That's a different strategy.”
Labeled bonds
In addition to investments in fossil fuels, there was also talk of an interesting new trend in investor circles: the so-called "labeled bonds". According to Knaap, 2020 is “a good year for bonds like this. Bonds usually don't have much movement; they are a kind of tradable debt. But there are bonds with a label, where the person who issues them determines in advance what they should be spent on. For green or social goals, for example. Those labels are becoming popular, with € 304 billion already spent this year. More than in 2019. ”
Knaap referred to the so-called SURE Bonds that are issued by the EU. They are used to protect jobs within the EU. APG recently invested 170 million euros in these SURE bonds. Knaap: “It is an interesting development, because the investor in debt, which is normally a remote investor, has more and more influence on policy. Because he or she can choose to put the correct labels on his bonds.” He cites the ECB as an example. “Previously, the ECB bought bonds and that was a neutral monetary operation. But you see that more and more labeled bonds are being bought there too. From the right parties with the right labels. In this way, investors have a little influence on what happens in the world.”