ABP, Akademiker Pension, Ircantec and three New York City Retirement Systems have been scored as the leading pension funds to shift away from fossil fuels to tackle climate change impacts, new research has revealed.
The study, conducted by the Centre for Climate Finance and Investment at Imperial College Business School in partnership with the Carbon Tracker Initiative, scored financial companies according to whether they had explicit policies on eradicating financing for fossil fuel expansion or investment from their operations. It also assessed the extent to which they had accomplished their aims.
Fifty institutions were assessed in the study, with nine awarded gold for their efforts in driving sustainable change.
These nine investors included ABP, Akademiker Pension and the New York Retirement Systems (NYCERS, TRS, BERS), Danske Bank, Generation IM, Hadelbanken, Ircantec, La Banque Postale and Sarasin & Partners.
To identify these institutions the researchers screened investors debt and equity, climate commitments and delivery.
“The landmark Paris Agreement has prompted financial market participants to rethink climate risk and opportunities,” said Dr Iva Koci, a research associate for the Centre for Climate Finance & Investment at Imperial College Business School, and one of the report’s lead authors.
“We see these awards as an assessment of financial institutions, resilience and leadership of their management - at a time of great and growing disruption of the incumbent fossil fuel system,” Koci added.
Pension funds in focus
The report revealed that the €474bn Dutch pension fund ABP’s high score was due to its announcement to divest from fossil fuels in phases, with the investments making up €15bn (3% of its portfolio), “showing its concerted effort to align investment with achieving net zero by 2050”.
Regarding Akademiker Pension’s assessment, the report highlighted its recent divestment from fossil fuels, with the fund selling its stake ($4.6m) in Eni after engagement with the oil major failed. The study also highlighted Akademiker’s involvement in a group of investors representing $1.5trn AUM who called out five European banks (Barclays, BNP Paribas, Crédit Agricole, Société Générale and Deutsche Bank) for their continued funding fossil fuel expansion.
This comes as Barclays, one of the five largest banks in Europe has confirmed today that it will no longer fund new oil and gas projects.
French pension public sector fund Ircantec's rating was deduced from the asset owner’s divestment from high-emitting sectors since 2016 and strong climate policy, the report explained.
Three of the pension funds that make up the New York City Retirement Systems were voted highly due to their climate approach as a result of divestment since 2018 and exclusions.
“This report shines a light on banks and investors with credible climate commitments who have decided to walk the talk on their net-zero promises by ending investment in new fossil fuel projects. Each stands as a shining example of how finance can support our ambition to keep global temperature rises to 1.5C,” Catherine Mckenna, chair of the High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State said.
