UN pension fund pledges to reduce investment-induced greenhouse gas emissions by 29% in 2021

The USD 85bn United Nations Joint Staff Pension Fund (UNJSPF) has set new climate targets to reduce its investment-induced greenhouse gas emissions by 29 per cent in 2021.

It has also set a further target to reduce such emissions by 40 per cent by 2025, as well as monitoring sector targets and intensifying advocacy for climate action. Its greenhouse gas footprint will be reduced for its equities and corporate bonds’ portfolios. Its targets will be achieved through divestment and engagement in companies of the UNJSPF portfolio. Short-term portfolio-level reductions will be achieved predominantly through divesting.

“Climate change is a critical challenge that we need to address. With this ambitious commitment, we want to accelerate the transitioning of our investments towards a 1.5°C scenario, addressing Article 2.1c of the Paris Agreement,” UNJSPF representative of the secretary-general, Pedro Guazo, said.

Supporting the UN’s Sustainable Development Goals and specifically climate action, the Office of Investment Management (OIM) of the UNJSPF is a member of the UN-convened Net-Zero Asset Owner Alliance formed in 2019. The alliance, described by UN Secretary-General António Guterres as “the gold standard for the slew of commitments to net zero,” is committed to transitioning its investment portfolio to net-zero greenhouse gas emissions by 2050.

“The UNJSPF is now planning to be more ambitious than the current Net-Zero Targets. The UNJSPF believes that it should serve as an inspiration for the industry,” Guazo added.

The UNJSPF will also monitor sector targets on the alliance’s priority sectors (oil and gas, utilities, steel, cement and transport – aviation, shipping, heavy and light duty road) based on the best available science as compiled in the Intergovernmental Panel on Climate Change and as recommended by the alliance guidance for such targets. The UNJSPF will also take action to prompt further greenhouse gas emission reductions, in line with the Alliance’s recommendations.

“We will be engaging companies with climate-related objectives prioritizing the largest polluters of OIM’s portfolio. We want to ensure companies’ strategies, activities and actions are aligned with the goal set in the Paris Agreement,” OIM CIO, Toru Shindo, said.

In 2020, the Fund finalised coal divestment following the commitment that was made in 2019 to divest from publicly traded companies in the coal energy sector. The fund also committed to implement the recommendations of the Task Force on Climate-related Financial Disclosures.

Commenting on the UNJSPF’s commitment, Make My Money Matter CEO, Tony Burdon, CEO, said: “The UN has a critical role to play in our transition towards a zero carbon world, and the announcement that they will commit their pension - representing over 130,000 pension pots – to net zero shows they recognise the power of our pensions in driving that transition.

“It also demonstrates that they are prepared to listen to their members - the majority of whom want their savings to tackle the climate crisis, not fuel the fire. With COP26 on the horizon, we want to see pension schemes across the globe follow the UNJSPF’s lead and join the race to the top among pension schemes. The pensions schemes of other other multilateral institutions, the World Bank, IMF and others need to step up and commit too.”

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