Currently, the COP26 in Glasgow is in full swing. I look back on a year of campaigning with WWF NL to bring the Net Zero Asset Owner Alliance (NZAOA) to the attention of Dutch asset owners.
The goal of our collaboration was to guide as many Dutch asset owners as possible to embrace a 1.5-degree target in the run-up to COP26. This would allow investors to join the Glasgow Financial Alliance for Net Zero, also known as the GFANZ, prior to the conference.
The alliance is a collection of actors in the financial sector, led by former Bank of England executive Mark Carney. With enough commitments from the Dutch financial sector, it was an option to present jointly as Dutch asset owners at COP26.
During COP26 at least 60 asset owners (united in the NZAOA) with $10 trillion in assets under management are presenting their net zero commitments and contribution in Glasgow. Countries like Denmark, France and England are well represented with a number of large but also small parties. Dutch asset owners, though often positioned at the front of the discussion on Responsible Investment, were less enthusiastic and less well represented.
Despite the fact that most Dutch asset owners have united in the Climate Commitment for the Financial Sector, to date, no concrete targets have been published that honor the 1.5-degree ambition, as supported by the NZAOA. During our campaign with WWF NL, we reached out to 81 asset owners to underscore the urgency of ambitious climate targets and to accelerate the process.
Part of this was, for example, an open letter that Angelique Laskewitz (Director VBDO) and Kirsten Schuijt (Director WWF NL) wrote to the 81 asset owners. The letter was written to encourage them to embrace ambitious targets, dialogues and also bilateral talks.
To date, Pensioenfonds Detailhandel, Stichting Pensioenfonds IBM Nederland, Univest and, since COP26, Aegon, have officially announced their intention to join the NZAOA. In addition, Athora Netherlands will soon officially announce its affiliation with the NZAOA.
With this, five financial institutions are committing to embrace a 1.5 degree target within a year. It is noteworthy that the boards of these organizations were the first to commit, but this could and perhaps should have been more.
Our 2021 Sustainable Investment Benchmark among pension funds, published last week, shows that to date, less than one in five funds has a concrete strategy to eventually reduce greenhouse gas emissions to zero. In addition, this year our benchmark among insurers showed that two out of five insurers have yet to draw up a concrete climate policy.
Well below par
Indeed, most asset owners in our benchmarks are united in the Climate Commitment for the financial sector. The most important agreement of the Climate Commitment is that in 2022 the affiliated parties report their action plans, including reduction targets for 2030.
Herein, this does not specifically target 1.5 degrees or intermediate targets to 2050. During our tour of the asset owners, the reason that the climate commitment was signed was the main reason for not going further. As far as I’m concerned, it’s not a question of either-or but of and-and.
Jan Willem de Vaal of Athora Netherlands agreed last week when I asked him why they wanted to join the NZAOA. He stated that the climate commitment has certain ambitions which they adhere to, but the NZAOA makes these ambitions more concrete. ‘The initiatives are not mutually exclusive, but in fact strengthen each other,’ was his conclusion.
Returning to why we would have liked to have been at COP26 together: we can walk faster and take more action, but only if we don’t stare blindly at what is happening in the Netherlands or keep insisting that we are already doing so much. Our benchmark clearly shows that the current efforts are way below par when it comes to climate.
Show more ambition
Like the five leading asset owners who have signed up, let’s show more ambition, cooperate internationally and learn from each other. COP26 could have been a good starting point for this, to stand side-by-side with the Western European sector peers and choose for and-and.
Nevertheless, I remain hopeful that in 2022, when the Dutch asset owners have to deliver on the climate commitment, they will come up with ambitious targets that go beyond what has been agreed. I will get back to you by that time.
For now, I would like to congratulate Pensioenfonds Detailhandel, Stichting Pensioenfonds IBM Nederland, Univest Aegon and Athora Netherlands. They are taking the first step towards their robust climate strategy that honors the 1.5-degree scenario and for which we continue to steer.
This piece was previously published in Financial Investigator