ABP overhauls responsible investment strategy to focus more on selecting sustainable companies

ABP, the €356bn pension giant for Dutch civil servants, has announced an overhaul of its responsible investment strategy, entailing an increased focus on sustainable companies, a doubling of environmentally-friendly investments and a 25% cut in carbon emissions in the equity portfolio.

In a statement, ABP said it wished to further raise the standards for responsible investment both for the sake of its members and society as a whole. As a result, “our policy change will lead to a different approach that centres on a conscious choice for sustainable investments,” it said.

This new approach would mean a “decline in the number of investment types” in the portfolio as well as “better engagement” with companies – and not at the expense of good returns for its 2.8m members. To illustrate the better engagement, the Dutch scheme said that from now on, it would interact with companies worldwide on the issues of human rights, security and education.

Said ABP Chairman Corien Wortmann-Kool: “We are convinced that responsible investment will generate the most value in the long term. Decisions regarding whether an investment is responsible and sustainable will carry a lot more weight and the threshold for inclusion in our portfolio will be raised.”Another element of the new strategy is a plan to double investments in what ABP calls a “better and cleaner future” to €58bn in 2020 from €29bn now. According to ABP Board Member Xander den Uyl, such investments include renewable and clean technology, waste and water management, green bonds and recycling. The scheme already has €356m invested in green bonds and plans to raise its renewable allocation fivefold to €5bn by 2020 as part of the larger goal. ABP’s statement also mentions additional investment in education.

Finally, ABP pledged to reduce the carbon emissions from its equity portfolio (4,000 to 5,000 companies) by 25% over the next five years. Though it said it was laudable, this was insufficient for ABP Fossil Fuel, an NGO formed by some of ABP’s members who are demanding fossil fuel divestment.

Said Vatan Hüzeir, Co-Founder of ABP Fossil Free: “Over 10,000 members have called on ABP to be free of investments in fossil fuels. If ABP wants to truly be sustainable, it cannot continue to invest in the companies that are pushing us into climate chaos.” According to the NGO, the Dutch scheme has around €30bn invested in the fossil fuel sector.

Xander Den Uyl, Trustee, ABP is speaking at RI’s ESG 2.0 conference in London on Thursday 19th November link