‘Net Zero’ framework helps APG deliver on clients’ climate ambitions

Published on: 10 March 2021

A group of 32 investors, including APG, has issued the ‘Net Zero Investment Framework’. It offers practical guidance for investors to tackle climate change and achieve net zero carbon emissions by 2050.

 

The Net Zero Investment Framework (NZIF) enables investors to align their portfolios with the Paris climate goals. In practical terms, this means that the investment strategy is made consistent with achieving a global target of net zero carbon emissions by 2050. The framework has been developed by over 110 investors through the Institutional Investor Group on Climate Change (IIGCC). APG is co-chair of this initiative.

 

Commitment to Paris climate goals

‘APG and its pension fund clients are committed to contribute to the goal of the Paris agreement to keep global warming limited to 1,5 degrees,’ says Joost Slabbekoorn, Senior Responsible Investment & Governance Specialist at APG Asset Management. ‘ABP, our largest client, has committed itself to a net-zero portfolio by 2050. This framework helps us deliver on those commitments.’

The framework defines principles and thresholds for targets on decarbonizing investment portfolios and investing in climate solutions, such as renewable energy, low-carbon buildings, and energy-efficient technologies.

In addition, the framework contains minimum requirements for investors to induce the companies in their portfolios to operate in line with the Paris Agreement.

It also recommends tools and methodologies for this purpose. This is done for overall strategy and asset allocation, as well as on asset class level for listed equity, corporate bonds, sovereign bonds and real estate.

 

Clients’ targets

APG and its clients already have climate-related targets for 2025, such as investing in renewables (ABP: €15 billion) and reducing the carbon footprint in listed equities (-40%). The framework helps us by combining these targets in a systemic framework that is comparable across the entire investment industry. It is intended for investors to adopt it on an ‘implement or explain’ basis.