Climate at DPAM
Climate change is increasingly impacting economic activities. While transition risks, such as carbon pricing, are only impacting the economy marginally today, devastating climate events are likely to increase the risk of disorderly policy responses, further impacting the economy. See the facts below relating to the costs of climate events.
USD 4 billion
Minimum cost of each of the 10 most financially costly climate events of 2024.
(source: Christian Aid)
USD 16.3 mn per hour
Average cost of 185 extreme weather events during 2000-2019, totalling around USD 143 bn of damages.
(source: Newman, R., & Noy, I.)
EUR 738 bn
Economic losses due to climate related extremes in the EU, 1980-2023, with nearly a quarter of losses between 2021-2023.
(source: European Environment Agency)
USD 4 billion
Minimum cost of each of the 10 most financially costly climate events of 2024.
(source: Christian Aid)
USD 16.3 mn per hour
Average cost of 185 extreme weather events during 2000-2019, totalling around USD 143 bn of damages.
(source: Newman, R., & Noy, I.)
EUR 738 bn
Economic losses due to climate related extremes in the EU, 1980-2023, with nearly a quarter of losses between 2021-2023.
(source: European Environment Agency)
Does climate integration and the NZAM commitment put fiduciary duties at risk?
Climate integration is a values debate, not a value debate?
Is integrating climate only about risk management and not transition planning?
Foundations of our climate approach
Over the years, at DPAM, we have integrated climate related risks and opportunities in our investment decision making processes. Our climate integration approach is founded on the TCFD recommendations. To reflect best market practice, our approach to net zero is based on the Glasgow Financial Alliance for Net Zero framework, structured around: governance, metrics & targets, implementation and engagement. Find more information on these below:
Net zero
Our approach is based on four key foundations:
Climate metrics and targets
Net Zero Asset Managers initiative
In 2022 DPAM joined the Net Zero Asset Managers initiative and committed to support investing aligned with net zero emissions by 2050 or earlier.
Science-based targets
DPAM’s methodology for corporate portfolios is based on the Science Based Target initiative. We encourage investees to adopt a science-based target (SBT). DPAM has committed to reach 100% of portfolio constituents by 2040.
At the end of 2024, 71% of assets under management were invested in companies with a validated SBT or 1.5C temperature alignment (based on scope 1 and 2 greenhouse gas emissions) up from 57% at the end of 2023.
Principal adverse impacts
We additionally monitor the principal adverse impacts of our investment decisions through a range of indicators.
Implementation of climate integration
Implementation within our investment activities takes place at policy, activity and product level:
Policies and conditions
We develop climate related investment criteria and definitions including Transition Finance or the green bond investment approach.
Activities and decisions
We undertake climate-risk assessments and monitoring at entity and portfolio level as well as individual investee level monitoring.
Products and services
We monitor requests for proposals and the development of new solutions including a tool to develop actively managed Paris aligned solutions.
Updates
We provide quarterly updates on regulation and market trends to inform investment and allocation decisions.
Governance
TCFD Steering Committee
Climate-integrated investment decision making is centered on the TCFD Steering Committee, which advises other DPAM bodies on varied issues including: definitions, tools, data providers, actions, metrics, methodologies, data, integration, frameworks and new solutions.
Management Board
Final validation remains with the Management Board and the TCFD Steering Committee also ensure proper training for all investment professionals
Climate engagement and voting
Our engagement activity is individual and collaborative and we also engage with regulators, policy makers, financial institutions NGOs and academics.
We vote to reinforce our engagement priorities and have developed a case-by-case voting escalation process for climate risk management.
In 2024 we:
Conducted 204 engagements linked to the climate
Sent 28 letters including the climate topic, post voting
Cast 13 Say on Climate votes
Find out more about our approach in our Engagement Policy and Voting Policy
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