Ageas has already established a strong track record for investing in a sustainable way, most visibly through its real estate and infrastructure investments, but also in many other domains. We talked with Wim Vermeir, Group Head of Investments Ageas and Bernadette Migisha, lead Sustainable Investments, about the Group’s progress in this area over the past year.
What do we mean when we refer to Sustainable investment?
Wim: Short-term investing focuses on quick profit returns, while Sustainable investing balances traditional investing with ESG insights to improve long-term outcomes. It’s a completely different mindset. We are far more inquisitive and probing in our interactions with companies to help us gain a better understanding of a company’s long-term objectives and strategy, and their practices against the principles of ESG. We have a duty of responsibility towards our customers and society, and when you are adopting a 20–30-year horizon as we do, it’s the only way to move forward.
Bernadette: We are quite close to our target already (EUR 9.8 billion) and we are confident of reaching the goal. If we reach the target sooner, we will not stop there. We will continue to increase our investments in assets that have a positive impact on the environment and society and will discuss at the right time any new interim targets. We are also working towards creating the right balance between environmental and social investments, where moving forward we will do more to target investments linked to the environment. Ageas made a commitment to invest at least EUR 5 billion in climate related investments by 2024.
What are some of the accomplishments of 2022 that you would like to highlight in particular?
Bernadette: By far the biggest achievement was joining the UN convened Net Zero Asset Owner Alliance (NZAOA), a member led initiative of insurers, pension funds and foundations committed to transitioning investment portfolios to net-zero greenhouse gas emissions by 2050. As this is still relatively far away, Ageas has announced a first intermediate target of 50% reduction in emissions by 2030 across its equities and corporate bonds portfolio. For its real estate and infrastructure portfolio, Ageas will use specific targets. Joining the NZAOA very much demonstrates the Group’s commitment. It will help us to define a scientifically based methodology against each asset class, based on best practices of peers. This alliance puts Ageas in close touch with other industry leaders to share, brainstorm and create collaborative solutions.
Wim: Another highlight is our EUR 75 million investment in Fluxys in Belgium. This large gas distribution network will become the hub for Belgium’s energy transition towards a more sustainable economy. Fluxys is developing its infrastructure to accommodate the transport of hydrogen and to capture CO2 output, helped by its proximity to industrial producers. This investment demonstrates the role we want to play in helping society transition. Ultimately, we are in the midst of an industrial revolution and these kinds of investments will be critical.
Bernadette: We also continued to invest in core infrastructure projects in many different ways, from financing renewable energy sources to bringing fibre to the home environment enabling people to work from home efficiently. And we are for instance investing in the social housing sector that has a public interest mission to provide rentals to lower income households; in green bonds issued by corporates financing existing or future projects with positive environmental impact such as biodiversity conservation or energy efficiency improvement; in social bonds issued by banks to finance assets with social benefits such as microfinance loans or loans to small holder farmers in rural areas.
In what was a very challenging environment in 2022, did Ageas’s approach to investing sustainably change at all?
Wim: Since the start of the year, we had a headwind caused by the negative evolution of the financial markets. The war in Ukraine and the consequent increase in energy prices made it clear that our dependence on imported fossil energy is too high and the transition towards clean energy has to be accelerated. Our answer, especially in these kinds of volatile times, is to invest in the green transition via an increased level of investment in green bonds, solar and wind energy, and environmentally certified real estate.
Read more about Ageas’s commitment towards sustainable investing