Notes from the Netherlands: Really aligned with Paris | Opinion pieces
Instead, it was the € 9 billion pension fund, Dutch social security provider UWV, that took this important step.
ABP and PFZW are committed to decarbonizing their portfolios by 2050, but continue to invest billions of euros in polluting industries.
At the same time, Dutch pension funds, including ABP and PFZW, also claim to respect the Paris Agreement. These two things seem increasingly difficult to reconcile, especially after the recent alarming IPCC report which concludes that climate change is accelerating rapidly.
UWV’s divestment from fossil fuels followed, revealingly, with its decision to adopt a Paris-aligned benchmark. This suggests that a more ambitious climate policy than those currently pursued by most pension funds is needed to keep the global temperature rise below two degrees.
The scientific approach of the UWV contrasts with that of most Dutch pension funds, which base their (limited) exclusion policies mainly on ethical considerations (see the national report in this issue).
While these are also important, it is time for pension funds to step up their game if they are to comply with the Paris Agreement.
Excluding the worst polluters – including many fossil fuel producers – should be part of that effort. Sooner or later, all institutional investors will adopt Paris-aligned benchmarks anyway, whether they like it or not. Pension funds should save themselves the embarrassment of being late for the party.