Dutch Climate Agreement
The absolute emissions of the relevant investments in 2021 decreased by 17% compared to 2020 on a comparable basis (i.e. for the same asset categories as reported last year). From 2021, we also report emissions from emerging markets credits and infrastructure due to the greater availability of data for these categories. As a result, reported emissions are substantially higher than last year. It should be noted that, due to the considerable delay in the reporting of emission data by companies, the footprint has been calculated using emission data largely related to 2020, with the remainder consisting of 2019 data. These emissions data are linked to the portfolio at year-end 2021. This is a change in methodology from last year when the portfolio data of the same year as the year of the emission data was used. The absolute emissions data for 2020 in table 3.1a have also been adjusted compared to last year's reported data.
Starting this year, in addition to the absolute emissions (tonnes of CO2), we also report the carbon footprint/economic emissions intensity3 to increase comparability with other financial institutions. Another advantage of reporting the carbon footprint is that it takes into account PFZW's growth as a pension fund. After all, a larger number of participants means more premiums and a higher invested capital. In addition, we report the weighted average carbon intensity (WACI) for a number of investment categories, as reduction targets for listed equities and credit are based on the WACI. The reported carbon footprint and WACI are not adjusted for inflation or exchange rate changes.
In our CO2 emissions calculation, only scope 1 and 2 emissions of the investments are included. For a part of the investments, scope 3 emissions are also available, but the coverage and quality of the data is insufficient to report on them already. We plan to start reporting (partly) on the scope 3 emissions of our investments as of next year.
As part of the Dutch Climate Agreement, PFZW and BPF Schilders must start communicating on the 2030 reduction targets for their relevant investments in 2022. During 2021 significant time was spent formulating these targets. The approach to the reduction targets is not the same for each asset class. For equities and credit, the approach is based on reducing the CO2 intensity of the portfolio. This year, targets have also been developed for credit, real estate and infrastructure for the year 2025. Real estate and infrastructure have targets related to the percentage of companies in the portfolio that have communicated a Science Based Target.
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