Today, NN Group has published a comprehensive Climate Action Plan, which sets out a clear roadmap to reduce greenhouse gas (GHG) emissions to net-zero in its own operations by 2040, as well as in its investments and insurance underwriting by 2050. Previously, NN set interim targets for corporate investments (25% by 2025 and 45% by 2030) as well as for its own operations (35% by 2025 and 70% by 2030). Additionally, the Climate Action Plan includes a further tightening of NN’s investment policies on unconventional oil and gas, and thermal coal.
NN’s approach to reduce the risks and impact of climate change is based on two main pillars. The first, to help accelerating the transition to a low carbon economy. The second, to develop and offer products and services that address the environmental challenges of its customers. This Climate Action Plan explains how NN is developing metrics, setting targets and building a clear roadmap to net-zero GHG emissions by 2040 (own operations) and 2050 (investments and insurance underwriting).
Dailah Nihot, member of the NN Group Management Board: ‘The financial sector can play a key role in enabling a transition towards a low-carbon economy. Sustainability has been high on our agenda for many years, and is rooted in NN’s strategy with concrete targets since 2020. We aim to tackle GHG emissions for our investment activities, insurance underwriting portfolio, and across our own operations. Over the past years, we introduced new policies and tightened existing ones, set interim targets on GHG emissions and we doubled our investments in climate solutions. Our Climate Action Plan addresses some of the developments and challenges that we encounter on our way to net-zero emissions. It is clear that there is much more work to do, in order to further build and implement our strategy going forward, and we expect to review our plan regularly over the coming years.’
Decarbonisation following engagement
We primarily focus our efforts on dialogue and engagement with companies to stimulate their transition to a sustainable business model. We believe this offers the best opportunity to make a real impact. We monitor the developments closely. If we establish that there is insufficient progress or there is no willingness to improve, we dispose of the investments. We could decarbonise our investment portfolio quickly by eliminating exposure to companies in carbon-intensive sectors such as steel and cement. However, we still need these sectors while transforming for the future, and they need capital to be able to decarbonise and transition. In our Climate Action Plan, we describe our approach to assess an investee’s alignment to the Paris climate goals, and how we aim to change our overall portfolio over time to reach our climate objectives.
Tightening fossil fuel related policies
We have introduced oil, gas and coal policies since 2018. NN’s current exposure to oil and gas is approximately 1% to 2% of our total proprietary assets. We further tighten our policies and add additional criteria around unconventional exploration and production focused on Arctic drilling and shale oil and gas.
- Arctic drilling; we no longer invest or hold companies that directly derive more than 5% of their revenues from offshore oil and gas exploration in the Artic region. We have no existing exposure in our portfolio.
- Oil (tar) sands extraction; we strengthen our existing restrictions applicable to oil sands by lowering our thresholds from 20% to 5%. We will no longer invest in or hold companies that directly derive more than 5% of their revenues from oil sands extraction. We have no existing exposure in our portfolio.
- Shale oil and gas; we will no longer make new investments in companies that directly derive more than 30% of their revenues from fracking/ shale oil and gas. For companies with 5 to 30% involvement, investment is only allowed if a credible transition plan is in place. Existing investments will be divested.
- Exiting coal; since 2019, we have a coal phase-out policy in place for our investments, that aims to reduce thermal coal exposure to ‘close to zero’ by 2030. We have increased restrictions and will immediately divest from companies that have not demonstrated sufficient progress to reduce their involvement in thermal coal activities.
In July 2023, we will publish an updated version of the NN Group Climate Action Plan. You can download the full Plan here
