The UN’s $85bn staff pension fund (UNJSPF) has committed to Net Zero by 2050, and will cut its investment related GHG emissions by 29% by the end of this year and 40% by 2025, compared with 2019.
The fund said that it would reduce the absolute emissions footprint of its equity and corporate bond portfolios through a mix of engagement and divestment, but that the short term reductions would be primarily achieved through divestment. It exited coal in 2020, but its 2019 accounts show that 5% of its equity portfolio was invested in the energy sector.
As well as stepping up engagement with the largest emitters in its portfolio, the fund also plans to increase its investment in green and transitioning companies, it said.
Both the 2021 and 2025 targets are significantly more ambitious than the highest goals set by the investor group the Net-Zero Asset Owner Alliance – of which UNJSPF is a member – which recommends a 29% reduction by 2025. Pedro Guazo, Representative of the Secretary-General for the investment of UNJSPF assets, said that the fund “believes that it should serve as an inspiration for the industry”.
Tony Burden, CEO of UK-based pension investment campaign group Make My Money Matter, said that the targets were an “ambitious commitment”, which “puts climate at the heart of the [UNJSPF’s] investments”.
Burden called on the pension funds of other multilateral institutions, including the World Bank and IMF, to make similar commitments.
“With COP26 on the horizon, we want to see pension schemes across the globe follow the UNJSPF’s lead and join the race to the top among pension schemes”, he said.