ABP Comes Closer to Reaching Sustainability Goals

How the biggest Dutch fund boosted its ESG investments in 2018.

By tweaking requirements for big carbon emission companies and sectors, the Netherlands’ biggest pension fund is on track to meeting the United Nations’ sustainability targets as well as its own.

In its most recent environmental, social, and governance (ESG) report, the $482 billion ABP’s sustainable goal-related investments increased by $6.3 billion last year, totaling  $62.3 billion, or 14% of the entire portfolio. This is only $2.6 billion shy of its $64.9 target for next year.

One of ABP’s big focuses is in green bonds, or a debt that goes toward the funding of sustainable projects, such as infrastructure. Its green bond investments grew by $2.4 billion last year, to $6.1 billion. It is now invested in 141 types of green government bonds.

Last year, the civil service retirement fund cut its carbon-related investments to 25% of what they were in 2014. These occurred by both selling carbon-emitters and buying more environmentally friendly companies’ stocks.

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ABP analyzed the sustainable credentials for 7,700 out of 10,000 businesses. It added 150 companies and other investments, such as South Sudan’s government bonds, to its exclusion list. This resulted in the divestment from various tobacco and nuclear arms firms.

The fund also excluded PetroChina, Tokyo Electric Power, and Walmart due to their flouting of the UN’s Global Compact, which wants to end violations of human rights and the environment in corporate practices.

ABP also upped its renewable assets to $5.4 billion during 2018, bringing it just $111 million shy of its 2020 target. These holding were about 11% of its energy portfolio at year-end.

ABP’s green push is in line with that of the UN’s Sustainable Development Goals, a 17-item directive geared to producing sustainability, ending poverty, promoting diversity, and others causes.

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