$178Bn Investment Portfolio For Climate Emergency – Asset Management the Dutch way
Dutch asset manager PGGM Adjusts for climate change impacts
The Dutch asset manager PGGM is shifting its focus to the holdings most exposed to climate change in its investment portfolio. Such analyses will help PGGM improve aspects of future investments, such as purchased building locations.
PGGM’s holdings throughout roughly four thousand assets worldwide total to $15.5 billion before the inclusion of real estate stocks. Combined with their $16 billion’s worth of real estate stocks, that makes more than half of their investment holdings comprised of real estate and puts them in place to be the twelfth largest real estate owner across the globe.
Maarten Jennen, PGGM’s senior director and strategist for private real estate, states that pinpointing the effect that climate change will have on each at-risk asset is essential for the investment company to operate long-term.
To do so, PGGM has enlisted the help of the German insurance company Munich Re with their data analysis.
PGGM was able to identify the detailed levels of climate change risk regarding specific assets by combining geolocation data gathered from the New York software company GeoPhy and Munich Re’s risk analysis for these at-risk locations.
Locations at Risk
Of all the locations PGGM had to consider, Japan was labeled as the country with the highest risk overall.
As for cities, those in the U.S. hold that (unpleasant) award. Marrero LA, Savannah GA, Palm Harbour FL, Metairie LA, and Newark NJ are all slated for storm surge risk, while Palm Harbour was the only city safe from river flooding and Savannah from tornadoes. For specific properties, the majority of their top five properties with the largest risk are in Miami, at risk of storm surges, river floods, cyclones, and tornadoes.
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Jennen comments that, while the company will not see any immediate results from this data, it is crucial to have so that individuals and businesses can determine whether to combat the risk associated with the assets or sell them. The data collected, Jennen continues, will help PGGM decide on where and in what to invest.
Uniting Against Climate Change
On a more positive note, PGGM is taking it upon itself the task to combat the incoming threats that climate change poses. Partnering with the Dutch pension fund APG as well as Norgest Bank Investment Management, PGGM and co. will be helping to fund an expansion to the European Union’s Carbon Risk Real Estate Monitor (CRREM) project.
The CRREM project, with new funding, will now be able to provide investors in the Asia Pacific and the Americas monitoring services and advice on how to reduce their carbon footprint.
What with weather patterns becoming less consistent due to climate change, PGGM hopes that the steps they take in this analysis will allow them adjust their climate impact and conduct more stable investments. PGGM expects governments will be taking similar steps toward solutions with less climate impact.