As an international organization, we recognize the urgency of the climate crisis and the need to take bold action to mitigate its impact. In 2020, the Office of Investment Management (OIM) committed to becoming Net-Zero by 2050. To further cement this commitment, we joined the Net-Zero Asset Owner Alliance in 2020.
The Fund successfully achieved its pledge to reduce the absolute greenhouse gas footprint of its Equities and Corporate Bonds’ Portfolios by 39% in 2022 compared to 2019 levels. The Fund’s 2030 target is to achieve a 40% – 60% reduction compared to 2019 levels.
The UNJSPF published its first TCFD report, which can be found here.
We believe that achieving Net-Zero emissions is not only the responsible thing to do, but also presents an opportunity for us to lead by example and inspire others to act. Find out more about how the UNJSPF is leading the way to Net-Zero.
The Office of Investment Management (OIM) has set ambitious carbon reduction targets. The UNJSPF has set a 40% absolute reduction target for its public equities, corporate bonds and private real estate portfolios by 2025 compared to 2019 levels and has already achieved a 39% reduction in 2022. By 2030, the Fund will target a reduction of its financed emissions from 40% to 60%. This significant reduction has been reached through divestment from fossil fuels and engagement with portfolio companies.
The fund’s 2025 target is to achieve a 40% reduction compared to the 2019 level.
Over recent years, OIM has placed its focus on climate change issues, particularly on high emitting companies. In 2022, 72% of environmental engagements were related to climate change. Through this strategy, we aim to:
Engagement with high emitting companies:
OIM engages with 82 companies, representing the top carbon emitters of our investment portfolio. We adopted an escalation process for companies that do not reach our engagement targets (voting against board re-election).
The engagement strategy has already positively influenced companies: out of our focus group, there are already 21 companies that have set carbon reduction targets in line with the targets that were set during the engagement process.
The Fund’s objective is to identify and invest in companies that are most effectively managing transition risks and are well positioned for the long term. Using a proprietary model, we monitor our current exposure to this theme and identify, within the fossil fuel industry (as quantified by revenues), companies that are already transitioning their business models and that we should still get exposure to.
Access the Fund’s first TCFD report in 2022 here.
In line with the Net-Zero Asset Alliance, we believe that companies should develop transition pathways towards decarbonization. There are two main principles we would like companies to adopt:
To achieve these two goals, the Fund has implemented two pillars: i) exclusions and ii) an engagement strategy.
Divestment from coal mining, applying a threshold of 1% of revenues coming from thermal coal mining
For the mining sector: strategy based on Capital Expenditure (CapEx) consistent with goals of the Paris Agreement, including no new coal mines and ultimate phase out of coal production for unabated use (no carbon capture and storage) consistent with the objectives outlined in the Paris Agreement.
For the utilities sector: plan for cessation of coal-fired power by 2030 in the Organisation for Economic Co-operation and Development (OECD) Member countries and by 2040 in other countries, in line with the Powering Past Coal Alliance (PPCA) goals.
We will engage beyond this timeframe with companies which fail to align with these ambitions.
Oil & Gas
We support the Alliance position on fossil fuels. In particular, for oil and gas, we believe that:
The Fund has implemented two strategies related to oil & gas:
Divestment from companies with revenues from oil and gas exceeding 10% across the entire value chain (upstream, midstream, and downstream) and including unconventional fossil fuels (shale oil & gas, oil sands production, unconventional drilling techniques).
Despite having divested from the upstream industry, we participate to investor engagement networks, such as Climate Action 100+
We also engage with transitioning companies and companies where revenues fall below our threshold
Finally, we ask financial services companies to align their financing, underwriting and investing activities with the goals of the Paris Agreement and the achievement of net-zero emissions by 2050.