ABP – which is Europe's largest public sector pension scheme by assets under management – has today committed to decarbonising its portfolio using the Net Zero Investment Framework (NZIF).
Developed by the Institutional Investors Group on Climate Change (IIGCC), the NZIF is seen as the gold standard for being a ‘net-zero investor’, with signatories conducting extensive engagement, selective divestment, and ensuring any trade association advocacy is consistent with net-zero goals.
The National Trust for Places of Historic Interest or Natural Beauty, the Church of Sweden, South Yorkshire Pension Fund, Wiltshire Pension Fund and TPT Retirement Solutions, have also signed up to the framework today.
The six investors join a larger group of 38 – both asset owners and asset managers – representing $8.5trn (£6trn) in assets, which have committed to decarbonise their portfolios by 2050 or sooner and increase investment in climate solutions in line with net-zero emissions.
“Growing uptake of the NZIF ensures more investors are now able to maximise their contribution to the energy transition by adopting a net-zero investment strategy,” said Stephanie Pfeifer, CEO of the IIGCC.
“Net-zero commitments are vital but must be matched with robust action plans.”
Independent analysis, across $1.3trn real-world investor portfolios, has shown that net-zero alignment is a “no regrets choice”, with scope for investors to secure notable benefits over a business-as-usual approach to investment, according to the IIGCC.
The NZIF provides metrics and methodologies for four asset classes – sovereign bonds, listed equity, corporate fixed income and real estate – with work already underway through the IIGCC's Paris Aligned Investment Initiative to establish approaches for infrastructure and private equity.
The initiative is today also launching a work stream to define how to align to net zero for derivatives as an asset class, and broadening the scope of strategies and asset classes covered by the framework, including hedge funds.
ABP board member, Loek Sibbing, said: “Climate change is one of the biggest issues facing the world today. We at ABP are taking actions in our responsible investment policy to counter it.
“Much depends on standards to be able to steer in the right direction. The NZIF commitment will help ABP on our pathway to an effective net-zero investment strategy.”
Image credit: iStock
Author: Chris Seekings
