ABP implements stricter ESG standards
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Europe’s largest pension fund, ABP, headquartered in the Netherlands, has announced a more stringent environmental, social, and governance (ESG) policy for its investment portfolio.
The new policy will prioritize companies deemed more environmentally friendly and socially responsible.
ABP stated that it will now subject its holdings to tougher scrutiny regarding climate and biodiversity risks, with a clear stance against companies contributing to climate change.
Those unable or unwilling to adapt to a changing world will no longer be considered suitable for investment, while companies effectively managing such risks will be favored.
As part of its strategy to mitigate future losses, ABP is reallocating €30 billion towards impact investments that incorporate climate and biodiversity considerations, with €10 billion designated for investments within the Netherlands. These investments will target sectors like affordable housing and sustainable energy.
The pension fund’s decision to divest from fossil fuel producers in 2021 reflects its commitment to aligning investments with its sustainability goals. ABP now seeks exposure to companies that factor in long-term risks while excluding those involved in controversies related to climate, nature, human rights, and corporate integrity.
Additionally, ABP’s exclusions extend to industries such as tobacco, nuclear weapons, civilian firearms, fur, non-organic pesticides, single-use plastics, and gambling.
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