Pension fund ABP to shake up share portfolio

Piggy bank with eurosDutch civil service pension fund ABP is implementing a new strategy which will boost investment in sustainable funds and companies and encourage firms to improve their social policies.

All 4,000 companies which ABP currently invests in will have to ‘apply’ for inclusion in the new-look portfolio, the fund said in a statement. ABP is one of the biggest pension funds in the world, with €350bn in assets and 2.8 million participants.

The fund expects €30bn of the €90bn it invests in shares to be switched because companies cannot meet its new standards, the Financieele Dagblad said.

Tests involving a dummy portfolio show that taking sustainability and social responsibility into account do not affect the overall returns. ‘The new strategy must not have an impact on the return on investment,’ the fund’s chairwoman Corien Wortmann told the paper.

The most concrete point in the new strategy is a commitment to reduce carbon dioxide emissions by companies within the share portfolio by 25% over the next five years. Investments which contribute to a ‘better and cleaner future’ should double to €58bn and investments in alternative energy should go up from €1bn to €5bn

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