NN Investment Partners (NN IP) is a member of the Net Zero Asset Managers Initiative (NZAM) and is committed to support the goal of net zero greenhouse gas (GHG) emissions by 2050, in line with efforts to limit global warming to 1.5°C. As part of this commitment and ahead of the COP26, NN IP reports that 37% (EUR 110 billion) of its total assets will be managed in line with reaching net zero in 2050 or sooner, by the end of this year. The scope includes assets managed in equity, corporate fixed income and sovereign bond portfolios.
NN IP is committed to achieve net zero emissions by 2050 for the corporate and sovereign bond portfolios in scope. For the corporate investment portfolio, a 25% CO2 reduction reference target by 2025 and a 45% reduction target by 2030¹ has been set. In the near future we aim to further increase our scope by developing new products that enable investors to invest in Paris Aligned products, and support our clients with their climate ambitions.
Adrie Heinsbroek, Chief Sustainability Officer, NN Investment Partners: “We believe we have a key role to play in financing the transition towards a net zero emissions economy, in which we strive to achieve impact and reduce emissions in the real world. There’s not one solution to contribute to achieving the goals set out by the Paris Agreement. We put capital to work to accelerate the transition to a low-carbon economy and engage with corporates and sovereign issuers on the importance of managing climate-related risks and taking action to transition to a low-carbon economy. This way, we can drive real change.”
NN IP aims to reach these reference targets via a bottom-up corporate Paris alignment approach in which we focus on real world impact. The corporate portfolios in scope will be transitioned towards the global goal of net zero emissions by 2050 by decarbonizing portfolios and by increasing investment in climate solutions. Active ownership plays an integral role in this strategy.
For sovereign portfolios, a strategy has been developed by following the approach as laid down in the IIGCC PAII Net Zero Investments Framework. In this strategy sovereign bonds are scored against a climate scoring methodology, which consists of a set of current and forward- looking climate related indicators. For new or re-investments, there is preference for allocation to issuers performing better on climate and/or eligible green bonds. NN IP will seek to further increase dialogue activities with sovereigns.
NN IP has taken the following actions to contribute to the transition to a low carbon world and will continue to build on this:
- Integrating climate change in our investment processes, by using our materiality framework, corporate and sovereign indicators and by measuring the carbon footprint of our funds
- Lowering our thresholds for restrictions on companies that derive their revenues from thermal coal mining and oil sands extraction from 30% to 20%
- Incentivizing investee companies to stimulate the transition to a low-carbon economy by using active ownership to foster change
- Actively using our voting rights: in 2021 NN IP supported 80% of climate-related shareholder proposals of which 75% of these votes on those proposals were against management
- Development of an escalation strategy with specific escalation tactics for our climate and palm oil related engagements, to maximize the effectiveness of our engagement efforts
- Offering a broad spectrum of investment solutions to our clients, for example in the area of sustainable and impact equity and a full range of green bonds funds, enabling clients to increase their exposure to green assets. NN IP is committed to increase its climate-related product offering
- Publication of an annual Task Force on Climate Related Financial Disclosures (TCFD) report as of 2022
Heinsbroek adds: “Reporting on the assets we manage in line with net zero is only the first step. We are continuously working on how we can further strengthen our approach to climate and how we can integrate climate change risks and opportunities in our investment processes.”
About the Net Zero Asset Managers Initiative
The Net Zero Asset Managers initiative brings together an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.
It currently includes 128 signatories managing $43 trillion of assets under management.
¹Baseline: emissions of 2019