Today, the United Nations Joint Staff Pension Fund (UNJSPF) set new ambitious climate targets to reduce its investment-induced greenhouse gas emissions by 29% in 2021 and 40% by 2025. The UNJSPF will also monitor sector targets and intensify advocacy for climate action.
“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,” said Pedro Guazo, Representative of the Secretary-General for the investment of UNJSPF assets.
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,” Mr. Guazo added.
With the decision taken today, the Fund pledges to reduce the absolute greenhouse gas footprint of its Equities and Corporate Bonds’ Portfolios by 29% in 2021 (the higher end of the recommended sub-portfolio target by the Alliance by 2025) compared to the 2019 level. By 2025, the Fund targets a 40% greenhouse gas emissions reduction from 2019. Those 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.
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.
The OIM will intensify its existing active engagement to promote sustainability and climate action. “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,” stated Mr. Toru Shindo, OIM’s Chief Investment Officer. The OIM will also take steps to identify and increase exposure to transitioning companies and green investments, Mr. Shindo added.
In 2020, the Fund finalized 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.
The mission of the Office of Investment Management (OIM) is to contribute to the global mission of the United Nations family of organizations by ensuring the long-term financial sustainability of the United Nations Joint Staff Pension Fund. The UNJSPF provides retirement, death, disability and related benefits to over 215,000 staff, retirees and beneficiaries of the UN and 24 other member organizations of the Fund. The OIM is responsible for the investment management activities of the UNJSPF, overseeing over $85 billion of assets. The fiduciary duty to manage the assets of the Fund in the best long-term interest of its participants and beneficiaries encompasses a strong commitment to sustainable investing.