NN Investment Partners
NN Investment Partners is a Netherlands-based asset manager, with headquarters in The Hague and 16 offices globally across Europe, Asia, and the Americas. It joined the Net Zero Asset Managers Initiative on 29 March 2021 and its initial target disclosure was published on 1 November 2021.
37% of total AUM
initially committed to be managed in line with net zero
USD $133.5 billion
currently committed to be managed in line with net zero
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Portfolio decarbonisation reference baseline
Target(s):
Portfolio decarbonisation reference target
The objective of the sovereign bond portfolio and corporate investment portfolio is to achieve net-zero emissions by 2050. For the corporate investment portfolio, the following CO2 reduction reference targets for the short and medium term have been set:
• 25% by 2025
• 45% by 2030 The target for the corporate investment portfolio will be set on an absolute basis with metric used normalise: tCO2e/EURm invested.
Portfolio decarbonisation reference target
The objective of the sovereign bond portfolio and corporate investment portfolio is to achieve net-zero emissions by 2050. For the corporate investment portfolio, the following CO2 reduction reference targets for the short and medium term have been set:
• 45% by 2030 The target for the corporate investment portfolio will be set on an absolute basis with metric used normalise: tCO2e/EURm invested.
GHG scopes included:
The top-down carbon reduction reference target for the corporate investment portfolio is set on Scope 1 & 2 of the financed emission (absolute carbon footprint). Scope 3 is not yet included in financed emissions because data quality is still largely based on estimations. However, disclosure and target-setting on material Scope 3 emissions is part of the bottom-up assessment of investee companies and engagement objectives.
Methodology:
Net Zero Investment Framework
Scenario(s):
The available tools used to inform the top-down target-setting of the corporate investment portfolio use the IEA’s Sustainable Development Scenario (SDS) reference trajectory. Some pragmatic adjustments were made to accelerate the pathway in line with our ambition to steer the investment portfolio towards net-zero emissions by 2050. When data providers will further update tools and methodologies, such as with the IEA Net Zero by 2050 scenario, we will further enhance the underlying analysis.
Additional information
Proportion of AUM committed:
Our first step in our commitment to Net zero in 2050 was to work together with a large client to develop Paris Aligned strategies. This has resulted in our initial scope as described in this document. In addition, we aim to develop new Paris Aligned products. As this takes time this has not yet been included in the initial scope. In the near future we aim to increase our scope of our assets managed in line with net zero as part of the NZAM commitment and expand the range of new Paris Aligned products.
Policy on coal and other fossil fuel investments:
NN IP has a companywide restriction in investments in companies (see our Climate Change Policy and norms-based RI criteria):
• That derive 20% or more of their revenues from thermal coal extraction or thermal coal distribution for all investments.
• That derive more than 20% of their revenues from oil sands extraction or oil sands pipeline transportation.
For sustainable and impact funds we have stricter criteria (see our viewpoint policy):
• This is a 5% restriction criterium on revenues from thermal coal related activities.
• Have 10% restriction criterium of combined exposure to all forms of unconventional oil and gas related activities
• The sustainable and impact strategies will not finance companies with expansion plans for unconventional oil & gas extraction and electric utilities constructing additional coal-based power production installations.
Further information:
Target setting: In the target-setting, we supported the client with analysis using various approaches and methods. In addition to the IIGCC recommended carbon budget approach, portfolio comparisons of carbon intensity were also made with regards to the industry average and peers to the extent possible. We believe that the intermediate reference targets are ambitious and consistent with delivering a fair share of 50% global reduction in CO2 emissions by 2030.
The IIGCC PAII Net Zero Investment Framework was used as a main guide for the development of our approach. To inform the top-down target setting process for the corporate investment portfolio, various approaches amongst which the IIGCC recommended carbon budget approach have been used.
We aim to reach these reference targets via a bottom-up corporate Paris alignment approach in which we focus on achieving impact in the real world. We focus on transitioning the corporate portfolios in scope towards the global goal of net zero emissions by 2050 via two dimensions: decarbonisation of the investment portfolios and increasing investment in climate solutions. Active ownership plays an integral role in this strategy.
For sovereign bonds, we developed a strategy by following the approach as laid down in the PAII Net Zero Investment Framework. In this strategy sovereign bonds are scored against a climate scoring methodology, which consists of a set of forward-and backward looking climate related indicators. For new or re-investments, there is preference for allocation for issuers performing better on climate and/or eligible green bonds. Also, we seek to increase dialogue with sovereigns on ESG and climate change related topics.