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Aegon commits to action against climate change

Global, December 22, 2015

Following last week’s global climate summit in Paris, where governments adopted the world’s first universal climate change accord, Aegon signed the Paris Pledge for Action, together with more than 500 businesses and investors.

Paris skyline and Paris Climate Summit Logo

Together with 150 cities and regions, its signatories represent 150 million people and US$11 trillion of investment. In signing the Paris Pledge, Aegon committed to quickly and effectively contribute to the implementation of the Paris Agreement and accelerating the transformative changes needed to meet the climate change challenge.

By signing the Paris Pledge, Aegon has committed to taking concrete steps now, without waiting for the agreement to come into force in 2020

Harald Walkate Head of Responsible Investment at Aegon Asset Management
 

This landmark agreement in Paris commits 195 states to cut greenhouse gas emissions to a level that will limit global average temperature to rise "well below" 2C (3.6F) compared to pre-industrial levels - a level of warming deemed to be the point when dangerous climate change could threaten life on Earth.

Taking action now

"By signing the Paris Pledge, Aegon has committed to taking concrete steps now, without waiting for the agreement to come into force in 2020," says Harald Walkate, Head of Responsible Investment at Aegon Asset Management.

Aegon has already made significant progress in this area by incorporating evaluations of climate risk into its investment process. "ESG (Environment, Society and Governance) is part of our research process," says Harald. "Portfolio Managers and Analysts all receive ESG training, and are provided with access to MSCI's ESG data. ESG ratings are also included in tear sheets."

Climate Change Summer Camp

Aegon also recently organized a Climate Change Summer Camp to increase awareness among its Portfolio Managers, Analysts and Risk Managers. Four external experts from different fields were invited to facilitate a discussion about ESG considerations, including experts from Shell and Carbon Tracker, as well as academics, to achieve a balanced view.

Aegon is considering establishing carbon reduction targets for its investments. Step one of the process is to measure the risks associated with carbon investments

 

Aegon is also considering establishing carbon reduction targets for its investments. Step one of the process is to measure the risks associated with carbon investments. "Our approach needs to be fact-based, it need to take into account risk as well as returns for our customers, and should not simply be a PR exercise," explains Harald.

PRI Climate Change Strategy Group

Aegon's preferred approach is to actively engage with companies to address climate related issues and to work together to see how companies can improve. Aegon is also one of a small number of companies taking part in the Asset Owner Climate Change Strategy Group, launched by the UN-backed Principles for Responsible Investment (PRI) this year.

The group was set up to help PRI members adopt the best approach to climate change. Co-funded by Aegon, the Group recently published a paper entitled 'Developing an Asset Owner Climate Change Strategy'.

The paper offers a step-by-step approach for addressing climate change across three main strategies: engage, invest and avoid. Case studies outline asset owner actions that are already underway, including several that have been started by project participants since the start of the project in January 2015.

Regular updates

"These are just a selection of the climate change initiatives we're working on as part of a cross-group effort, involving pension, insurance and asset management businesses across all of the key geographies where Aegon operates," Harald concludes, promising regular updates on target-setting, key learnings and progress made with industry partners to benchmark and improve performance.

Written by: Aegon