SUSTAINABLE INVESTMENT

Dutch pension giant ABP to dump €15bn in fossil fuel holdings

One of the world’s largest pension funds, ABP of the Netherlands, is to sell its entire holdings in fossil fuel companies worth more than €15 billion as pressure mounts on retirement schemes to protect long-term savings from the threat of catastrophic climate change. ABP expects to have sold the majority of its investments in oil, gas and coal companies by the first quarter of 2023. The holdings in about 80 companies currently account for almost 3% of ABP’s €528 billion total assets. The divestment means that ABP will no longer hold shares in oil major Royal Dutch Shell. The move by ABP follows the announcement in September by CDPQ, Canada’s second-largest pension fund, that it would fully divest oil producers from its C$400 billion portfolio by the end of 2022. (Financial Times)*

SUSTAINABLE AGRICULTURE

Unilever-owned Knorr to start 50 regenerative agriculture projects

Unilever's largest food brand Knorr has revealed plans to initiate more than 50 regenerative agriculture projects by 2026, with schemes planned that cover 80% of its key ingredients. Three of the 50 regenerative agriculture projects have already begun this year, enabling the business to gather learnings for the expansion of its project portfolio. Projects already underway are supporting tomato farmers in Spain and rice farmers in the US, who have already reported improvements in crop yield and soil quality, while reducing water consumption and greenhouse gas emissions. The funding for the scaling up of the regenerative agriculture portfolio is being provided under Unilever’s €1 billion ‘Climate and Nature fund’, which was launched last year as the firm updated its long-term environmental commitments. (edie)

CORPORATE REPUTATION 

Backers of UK airport expansion part of UN green investment scheme

Investors funding bids to expand UK airports have been accused of hypocrisy after it emerged they are signatories to a UN green investment scheme. Members of the Principles for Responsible Investment (PRI) scheme publicly commit to acting in “the best long-term interests of our beneficiaries”, including incorporating environmental issues into their investment analysis and decision-making. However, analysis by the environmental investigation group DeSmog has found that 13 signatories to the scheme are also investors in UK airports with expansion plans, including Heathrow, Gatwick, Stansted and Bristol. The investigation found that at least one investor in each of the seven airports seeking to expand is a member of the PRI scheme, including four out of five of Bristol airport’s shareholders and four out of Heathrow’s seven. (The Guardian)

CLIMATE CHANGE

Bank of England considers rules for banks to cover climate risks

The Bank of England will consider whether it should force banks to hold extra capital to cover risks from climate change, as central banks come under pressure to assess any shock to the financial system. The central bank’s Prudential Regulation Authority said it would examine whether changes to bank capital buffers might be necessary to manage the impact of climate change, and it would publish its findings by the end of 2022. Among the actions the PRA could take is to require banks to set aside capital both on a system-wide basis and on an individual basis, requiring banks to cover their specific exposures. The Authority distanced itself from the responsibility for directing money flows, stressing the move to a low-carbon economy is the responsibility of the government. (Financial Times)*

SUPPLY CHAIN

Philips wants suppliers to set science-based emissions targets

Health technology company Philips has announced a goal aimed at reducing the climate impact of its supply chain, aiming to have at least half of its suppliers committed to science-based emissions reduction targets by 2025. Philips stated the initiative could have an impact seven times greater than CO₂ reductions in its own operations. The company will take an active role in supporting and incentivising its suppliers in setting science-based targets, focusing on structural improvements at the companies to maximise the impact of CO₂ reductions, and offering incentives including direct support for capability building as well as preferential payment terms. It will also explore the establishment of Virtual Power Purchase Agreements (VPPAs) with suppliers, in order to support the development of new renewable energy projects and provide cleaner sources of energy. (ESG Today)

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