At NN, we have a clear ambition to support the global transition towards net-zero greenhouse gas (GHG) emissions by 2050, in line with efforts to limit global warming to 1.5°C. We have defined a first set of interim targets to steer and monitor the transition of our investment portfolio to achieve net-zero GHG emissions.
Transitioning our investment portfolio with asset-class specific strategies
NN’s strategy for transitioning our proprietary investment portfolio towards the global goal of net-zero emissions by 2050 has two dimensions: decarbonisation of the investment portfolio and increasing investment in climate solutions. Drawing on the Institutional Investors Group on Climate Change (IIGCC) Net-Zero Investment Framework, we have been developing asset class-specific strategies. A key principle in this framework is to utilise a comprehensive set of levers available to investors for accelerating decarbonisation in the real world.
Decarbonising our corporate investment portfolio
For the corporate investment portfolio (listed equity and corporate fixed income), we have set reference targets for GHG emissions reduction, to determine the direction and ambition and to monitor the effectiveness of our net-zero investment strategy. By 2025, we aim to reduce GHG emissions of our corporate investment portfolio by 25%, and by 2030 by 45% compared to 2019.
Investing in frontrunners of the transition journey
To implement our strategy, we developed a methodology to categorise companies (based on current and forward-looking criteria) according to their alignment or potential to align to a net-zero pathway. Through a best-in-class policy, we will seek to allocate new investments towards companies that are better positioned in their journey to transition to a low carbon economy. For existing assets, we focus on stewardship and engagement to drive alignment as we believe this gives the best opportunity to realise real-world impacts.
A similar methodology has been implemented for the sovereign bonds portfolios, where investments are scored against a set of current and forward-looking alignment criteria. For new or re-investments, there is preference for allocation to higher climate performing issuers and/or eligible green bonds. We are seeking to further increase dialogue activities with governments.
More than double investments in climate solutions by 2030
NN also defined criteria for qualifying investments across different asset classes as climate solutions, aligning with the EU taxonomy where possible. NN set a target to increase investments in climate solutions with at least EUR 6 billion by 2030, which would more than double our current investments in renewable infrastructure investments, green bonds and energy efficient real estate.
All these steps build on earlier decisions to restrict investments in companies that have activities in oil sands extraction and thermal coal mining, as well as execute a phase out strategy of thermal coal-exposed companies in our proprietary investment portfolio by 2030.
Sharpening targets for our business operations
In addition to the targets set for our investment portfolio, NN is committed to reducing GHG emissions of our own business operations by at least 35% by 2025, and 70% by 2030 (compared to 2019). To achieve these goals, we are implementing further measures to improve energy efficiency in our offices and taking actions focusing on company lease cars and business air travel.