APG i-Learning

EU’s Biggest Pension Fund to Dump $17 Billion in Fossil Fuels

ABP announces divestment plan as investors with $39 trillion prepare to offload fossil fuels.

Europe’s biggest pension fund, ABP of the Netherlands, has joined a growing number of investment managers blacklisting fossil fuels as the finance industry gives in to pressure from activists and customers alarmed at the prospect of a climate catastrophe caused by carbon emissions.

ABP said Tuesday it will divest 15 billion euros ($17.4 billion) worth of fossil-fuel assets by early 2023. The fund said it doesn’t expect the decision to hurt long-term returns and added that the move will allow it to unveil a more ambitious CO2 reduction goal next year. The announcement underpins the speed with which the investment industry is turning its back on oil, gas, and coal, with 1,500 asset managers overseeing a combined $39.2 trillion now committed to offloading such holdings, DivestInvest said in a separate release.

Read the full article here.

APG invests $750m in new SDG-focused EM private credit fund

APG has invested $750m (€660m) in an emerging markets (EM) private credit fund which follows the UN’s Sustainable Development Goals (SDGs).

The investment is the Dutch pension provider’s first venture into EM private credit. APG is the launching customer of the fund, which will be managed by ILX, an investment manager focusing exclusively on syndicated loans originated by development banks.

“We are initially planning to allocate 2.5% to 3% of our EMD-portfolio to this type of loans,” APG’s head of emerging market debt Sjacco Schouten told IPE.

He added: “We may want to further increase this at a later stage as we do not expect returns in this new category to be lower than for listed EM bonds, but we first want to see what results this new product yields us.”

APG is making the investment on behalf of two of its pension fund customers: ABP and BpfBouw, the fund for the construction industry. The investment is meant to improve the sustainability profile of APG’s EMD portfolio.

Read the full article here.

Dutch pension fund APG urges Korean big companies to take stronger climate action

APG Asset Management, a subsidiary of Dutch pension and Europe’s influential institutional investor APG with $712 billion under management, called South Korea’s big manufacturers including Samsung Electronics and LG Chem to commit more to reducing carbon emissions.

The company on Thursday said it had sent letters to CEOs and chairs of 10 South Korean companies where the Amsterdam-based fund has stakes in to urge the carbon emitters of more ambitious climate and carbon cut strategies.

The letters have gone to Samsung Electronics, Hyundai Steel, SK hynix, SK C&C, LG Chem, LG Display, Lotte Chemical, POSCO Chemical, LG Uplus, and SK Telecom.

“These companies are important to the Korean economy and the global supply chain. Transforming them into low carbon businesses is critical to the goal of climate crisis mitigation,” said Park Yoo-kyung, APG’s Head of Responsible Investment & Governance Asia Pacific.

Read the full article here.

APG launches first index funds to tap Dutch sustainability drive

APG Asset Management, the largest pension fund provider in the Netherlands, said on Wednesday it would begin offering index products and said its fund clients had pledged an initial 1 billion euros ($1.19 billion) to a low-carbon strategy.

APG's asset management unit oversees around 613 billion euros on behalf of pension schemes and companies, serving 4.7 million members in sectors from cleaning to construction.

In partnership with index provider Qontigo, part of Deutsche Boerse, and with BlackRock, the world's biggest asset manager, APG said it would initially launch five indexes within the iSTOXX APG World Responsible Investment Indices family.

Each is based on the iSTOXX World-A Index, a global developed markets stock index, and then tweaked using environmental, social, and governance (ESG)-related filters, which for example involves excluding certain companies.

Read the full article here.

Pension fund backs KPN’s €1.2 billion fibre plan

KPN has unveiled a new plan to roll out fibre to the best part of 1 million premises in underserved areas at a cost of €1.2 billion but will share the financial burden with pension fund APG.

The Dutch operator will establish a 50:50 joint venture with APG, with the pension fund contributing €450 million in return for its 50% stake, half as an initial payment and the remainder in annual installments based on the progress of rollout. The whole project will require capex of €1.2 billion, some of which will be financed via the debt market.

The JV aims to deploy fibre to around 910,000 premises in what it deems underserved areas, comprising 685,000 households in medium-dense areas and 225,000 businesses. The connections rolled out by the JV will be in addition to the 2.5 million connections KPN has pledged to achieve under its own steam in the coming years, meaning that in total the two projects will provide FTTH to 80% of Dutch households by 2026, as well as extending coverage for businesses.

Read the full article here.

Korean steelmaker Posco urged to cut ties with Myanmar’s junta

International pension funds pressure companies over joint ventures with military-controlled conglomerate.

Investors are urging South Korean industrial group Posco to exit a steel joint venture with a Myanmar military-controlled conglomerate as pressure builds on multinationals to cut financial links with the country’s junta.

APG, the $668bn Dutch pension fund, said it was among a group of investors worried their holdings in Seoul-listed Posco would undermine responsible investing commitments after Myanmar’s military overthrew Aung San Suu Kyi’s government in a coup in February.

They pointed to Japan’s Kirin, which announced it would pull out of its two brewery joint ventures with a Myanmar military-owned company during the week of the coup, as an example to heap pressure on Posco.

“The military is killing people every single day . . . A lot of investors are engaging [with the campaign at Posco],” said APG adviser Park Yoo-kyung.

Read the full article here.

This is what the outside world sees of APG

EU’s Biggest Pension Fund to Dump $17 Billion in Fossil Fuels

APG invests $750m in new SDG-focused EM private credit fund

Dutch pension fund APG urges Korean big companies to take stronger climate action

APG launches first index funds to tap Dutch sustainability drive

Pension fund backs KPN’s €1.2 billion fibre plan

Korean steelmaker Posco urged to cut ties with Myanmar’s junta