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ABP’s Mart Keuning on embracing investments with ‘intentional and measurable real-world impact’

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Published: 19 March 2024

Dutch pension giant ABP has just announced ambitious plans in the impact investing space. Mart Keuning, senior policy advisor, responsible investing, talks about the fund’s plans for the future.

ABP’s €30bn allocation into impact investments will be spread across climate and biodiversity solutions |Pablo Azurduy on Unsplash

In March, the €502bn Dutch pension fund ABP announced its intention to invest €30bn into impact investments within the next six years, of which over €11bn will be spread across climate and biodiversity solutions, and €10bn of which will be allocated within the Netherlands, focused on affordable housing, sustainable energy, and innovation. In a Q&A with Impact Investor, Mart Keuning, senior policy advisor, responsible investing at ABP, outlines the scheme’s plans in more detail.

Maha Khan Phillips (MKP): Can you give us some background about the decision-making process over the last few years that led to this commitment to pledge €30bn to invest in impact?

Mart Keuning (MK): As ABP we had targets on Sustainable Development Investments: 20% of total portfolio assets under management in 2025 and €15 billion related to SDG 7 (affordable and clean energy). That was a good first step, but we wanted to move beyond the SDIs to investments with an intentional and measurable real-world impact. The instrument of impact investing fits that desire well. We established our definition of impact investing in 2023: intentional, measurable, additional investments, with what we call a ‘double profit’: financially and societal. As a final step we set a target for our impact investment: we look to make €30 billion investments by 2030.

MKP: In your equity portfolio you will no longer invest in companies where climate and biodiversity damage is inherently linked to their business activities. What type of criteria are you using to assess companies and their success in reducing emissions?

MK: A few examples: companies that have a high climate risk exposure, such as utilities, transport companies and meat companies need to have their long-term reduction targets in line with the Paris goals, and need to report on their exposure, so we can track in the coming years if they act accordingly. For companies with a high biodiversity risk exposure, we expect solid policies to prevent deforestation and secure animal welfare. We chose not to invest in companies producing non-bio pesticides, one-time-use plastics, or fur.

MKP: ABP is allocating at least €1bn in biodiversity solutions. What type of solutions the fund is looking at and what opportunities are of interest to you?

MK: Examples are sustainable forestry and agro, meat substitutes, nature-inclusive construction. But the market is still maturing, and we will have to look actively for opportunities in this field.

MKP: How will you measure the contribution of positive social and environmental impact alongside financial return?

ABP wants impact to be measurable in terms of outcomes | ABP

MK: It is one of the conditions for our impact investment that the actual impact is measurable in outcomes. So not in input, activity or output but outcomes.

Also, we want to establish a theory of change for every investment. Measurement then differs from investment to investment. Renewable energy investments will be measured in CO2 emissions prevented, affordable housing in affordable houses built, etc.

MKP: The announcement follows on from last year’s initiative to set a target to halve direct emissions from your total investment portfolio compared to 2019. How is that process going and what are some of the challenges and considerations you have encountered?

MK: The biggest challenge is actually the measurement of the scope 1, 2 and 3 emissions of all our investments of such a large and diverse portfolio. We will report on this number for the first time in our annual report that will be published this spring. That will teach us where we stand and what is needed in order to achieve our targets. That being said, it will be hard to halve our invested emissions if emissions are not lowered in the real economy, so that is one part where there’s work to do: engagement with companies and policy makers.

MKP: What are some of the innovative approaches you are taking when it comes to impact that you are most proud of?

MK: We are currently tendering for the Dutch Noordzeker project. This is a collaborative effort between ABP, APG, and SSE Renewables, where we aim to provide sustainable energy for the Netherlands at a stable price for the coming decades. We are also working with the academics of Naturalis Biodiversity centre, to make maximum efforts to protect and where possible recover biodiversity and ecology in the North Sea while producing sustainable energy, if we win the tender. That is win-win-win. It is this type of collaborations that we believe have the potential to be successful for us as [an] investor and for the impact that we are trying to make.

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