Your investments and the Paris Agreement

Your investments and the Paris Agreement

The Paris Agreement is an international treaty that was adopted in 2015 by 195 member states of the United Nations to combat global warming. If you invest sustainably with ABN AMRO Portfolio Management, you will see in the report you receive how your investments contribute to achieving the objectives of the Paris Agreement.

 
 

The purpose of the Paris Agreement

The purpose of the Paris Agreement is to:

  • limit the long-term rise in global temperature to a maximum of 2°C, preferably to 1.5 degrees Celsius, by 2050.
  • reduce the emission of greenhouse gases and harmful substances as quickly as possible in combination with the available technology at the time;
  • to measure the objectives against current scientific knowledge about climate change once every five years and to adjust these where necessary.

The Sustainable Development Scenario (SDS)

The International Energy Agency (IEA) has developed the SDS ( Sustainable Development Scenario ) as a scenario to reach the goals of the Paris Agreement. According to this scenario, advanced economies should reach net zero emissions by 2050, China around 2060, and all other countries by 2070 at the latest.

The Paris Agreement in your report

Our dataprovider, ISS Oekom determines the expected future emissions of the companies in your portfolio. To see whether a company is in line with the Paris Agreement, ISS Oekom has drawn up a calculation method that is based on the SDS.

The expected future emissions are calculated for each company, given the sustainability strategy of the companies and the sectors in which they operate. These expected future emissions will be compared with the budget for each company. This is a sector based budget that is calculated for each company based on its market share.

You will see the following infographic in your report.

Your investments and the Paris Agreement: infographic

You will see years on axis 1. At the top you can see this year. The lower you look, the further we go into the future.

Axis 2 shows the amount of tCO2e (see our explanation of CO2 emissions).

The green bar is the expected emissions of the companies in your portfolio in the coming years, determined by our data provider, ISS Oekom.

In the yellow ‘slider’ you can see the amount per year that may be emitted to meet the objectives in the SDS. This has also been calculated by ISS Oekom. The Agreement is becoming stricter to achieve the targets, so you will see the slider move to the left in the future.

Based on these two elements, we can see whether the portfolio is in line with the SDS of the Paris Agreement. The basic principle is that the portfolio composition remains the same and that the companies implement the reported sustainability strategies.

The Dutch Climate Agreement

Under the Paris Agreement, each country draws up its own plans to contribute to the goals of the agreement. In the Netherlands, we talk about The Climate Agreement. We have drawn up our own climate agreement in collaboration with organisations and companies from different sectors.

Those national plans are laid down in Intended Nationally Determined Contributions (INDC). INDCs are the primary means through which governments communicate internationally about the steps they will take to address climate change in their own countries.

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