Climate and Energy

10 August 2022 | 4 min. readingtime

The urgency of the climate crisis is high. The IPCC already published a blazing report in 2018 and recently completed another reporting cycle. The latest scientific findings on climate mitigation and adaptation leave little room for doubt – the clock is ticking and the world needs to take action now.

a.s.r. climate and energy targets
Ever since the 2015 Paris Climate Agreement, a.s.r. has been actively contributing to the realisation of its objectives. We have been involved in the development of standards and measurement methods for financed greenhouse gas emissions right from the outset – initially in the investment portfolios but later also through insurance products and services. The goals we had set ourselves for the 2018-2021 period in terms of CO2e calculations and impact investments have now been achieved. Time for the next step.

Impact investing
Impact investing is where financial and social returns come together, and where the intention of the company or project is to achieve a particular social goal. We have drawn up corresponding guidelines for all our asset classes – of course in consultation with our auditor.

Examples with impact
Specific examples of our recent impact investments include a debt investment in Dogger Bank – the world’s largest offshore wind project in the North Sea – as well as a participation in SET Ventures’ third fund – venture capital geared towards the energy transition. We also regularly purchase green corporate or government bonds, provided they meet our criteria, and our private credit also allows us to hold ‘impact names’ from the SME sector in our portfolio, including a Dutch electric car leasing company.

Expanding our impact investments
For the period through 2024, we have challenged ourselves to expand our impact investments to 4.5 billion euros. This is substantial and not easy to achieve in a playing field with ever stricter definitions of what exactly constitutes ‘impact’. In addition, we now know the footprint of over 95 percent of our balance sheet investments in terms of CO2e emissions. Knowledge is power and now is the time to reduce: 65 percent by 2030 (from 2015). This applies to our investments in listed equities and corporate bonds, government bonds, mortgages and property[1]. This is how we aim to maintain our frontrunner role, within the parameters of the Climate Commitment signed in 2019 and Minister Kaag’s recently voiced expectations[2].

The road to Paris
The goal of net zero emissions by 2050 is still too far away. Specific goals for the shorter term are required on the road ‘to Paris’. This is what we ask of companies in which we invest, so we must give the right example. Our 2030 reduction target of 65 percent will therefore be further fine-tuned through our strategy for the fossil energy sector, the economy’s largest emitter of greenhouse gases by far.

Investing in line with net zero
We already said goodbye to our investments in coal a while ago. Before the end of 2021 we had already reduced our coal investments to the bare minimum, but now they have been sold altogether. Coal has no future as an energy generator in a 1.5 degree world.

In addition, we will engage intensively with the remainder of fossil energy companies to which we still have a debt or of which we still hold shares in the coming period, until the end of 2024. It is a short list. We want to make sure that the 2050 net zero targets that these companies have set themselves are actually supported by feasible, ambitious and specific interim steps towards 2025 and 2030.

We cannot keep putting off climate action in this sector any longer. If companies are unable to become the renewable energy champions of the future, then from 2025 onwards we will choose to invest our clients’ premium contributions elsewhere.

More information
You can find out more about our climate investment approach in our roadmap or our most recent climate report. These documents also provide more details on our approach to other sectors of the economy with a large climate footprint, such as agriculture, waste processing, water treatment, cement and steel, and transport.

 

[1] The 65 percent reduction target is a weighted target across the asset classes mentioned, which also have their own individual targets to prevent netting between asset classes and to minimise the effect of strategic and tactical overweightings and underweightings. For the balance sheet investments managed by a.s.r. vermogensbeheer (listed equities, corporate bonds and government bonds), a 70 percent reduction target applies.

[2] https://www.rijksoverheid.nl/actueel/nieuws/2022/06/06/minister-kaag-presenteert-agenda-verduurzaming-financiele-sector


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Author

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Raquel Criado Larrea

Head of Sustainable Investments

Raquel is responsible for SRI policy and implementation at ASR Nederland.

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