Baseline date: the portfolio-level emission target baseline is 2019.

Baseline performance: ABP’s climate action plan was published in Q4 2022. Performance will be reported on in 2023.

Target year(s): 2050 and mid-term target for 2030.

Target(s):

• Portfolio level target 1: net zero greenhouse gas emissions by 2050.
• Portfolio level target 2: 50% less greenhouse gas emissions in 2030.

GHG scopes included: Scope 1, 2 and 3 (i.e.: throughout the supply chain, including emissions stemming from the purchase and use of products).

Asset classes in scope: For the entire investment portfolio, so all material asset classes are included.

Net zero scenarios: ABP uses the following scenarios as reference for its RI policy: 1.5-degree scenarios with no or limited overshoot of the IPCC and IEA Net-Zero scenario.

Methodology: Since 2018, APG has had a multidisciplinary climate steering committee in which risk management, fiduciary management and portfolio management are represented.

This steering group coordinates the approach to managing climate risks and is the driving force behind the implementation of the climate risk policy. We map climate risks using the TCFD methodology as well as scenarios to stay within the 1.5 degrees ambition of ABP.

Quantitative target

Baseline date: 2020.

Baseline performance: ABP had 20% invested in the SDGs as of end 2022. Of that number, €18,4 billion was attributed to SDG 7 (clean and affordable energy) and €0,4 billion in SDG 13 (climate action).

Target year: 2025

Target: ABP wants to have invested 20% of its assets in SDI investments, of which €15 billion in the Sustainable Development Goal 7: Affordable and sustainable energy.

Methodology: APG uses the SDI asset owner methodology to define relevant investments.

Baseline date: 2020.

Baseline performance: ABP plans to have alignment assessments performed for all asset classes.

Target year: 2030

Target: 100% of assets should be aligned with Paris agreement in 2030.

Asset classes in scope: All asset classes.

Data sources:

On behalf of ABP, its asset manager APG measures climate risks in the real estate portfolio by using the Carbon Risk Real Estate Monitor (CRREM) tool. APG has contributed to the development of the Carbon Risk Real Estate Monitor (CRREM) for transition risks. This is a worldwide method to determine whether a building meets the objectives of ‘Paris’.

CRREM ‘transition paths’ have been drawn up that allow for each type of real estate to see how much CO2 per square meter is allowed until 2050 to stay within the target. ABP’s real estate alignment targets are: 100% AuM CO2-data in 2030, 100% assets CRREM pathway aligned or have a plan to become more sustainable.

Furthermore, in ABP’s newly published climate action plan it is mentioned that A) the complete portfolio will be in line with the goals of the Paris Agreement (that means net zero greenhouse gas emissions by 2050) B) ABP requires companies with a large climate impact to provide a Paris-aligned climate plan, incl. targets in line with net zero in 2050 and an obligation to report on emissions.

Approach:

We want to help and stimulate the companies in which we invest to make the climate transition. That is why we are going to conduct intensive dialogues with large-scale energy consumers and companies with a major impact:

• Utilities sector
• Transport sector
• Iron, steel, cement, and chemical industries
• Financial sector

We expect these companies to show on a regular basis that they are taking the necessary measures to achieve the Paris climate goals. That means:

• Reporting on emissions from production and in the supply chain
• Reporting on emissions from the use of the products where relevant
• Short-, medium- and long-term greenhouse gas emission reduction targets in line with the Paris Agreement targets
• Business investments that support the company in actually achieving these goals

We will evaluate this periodically.

If companies are not taking sufficient action to make the transition, we will escalate our dialogue and use our vote at shareholders’ meetings, support resolutions or (co-) submit resolutions. If these steps do not bring about change, we will eventually divest. We will set minimum requirements for companies in these areas and continue to tighten those requirements. Companies that fail to meet these increasingly stringent requirements will no longer be investable for ABP.

ABP also engages through the partnership with Climate Action 100+. ABP has recently (April 2023) updated its voting policy which contains more strict criteria on climate.

For illiquid markets, acknowledging the challenge of obtaining transparency on emissions, we systematically request as part of our pre-investment engagements, each investee or fund to commit to provide us with emissions information (directly or via platforms like GRESB).

In liquid markets, we use data providers to gather the published emissions data (listed and mid-cap unlisted companies) and use industry averages for smaller unlisted companies.