NN Group, a €198 billion Dutch pensions and insurance provider, has committed €500 million to CBRE to develop low-carbon affordable housing in the Netherlands.
The commitment is part of NN Group’s plan to invest €6 billion in climate solutions by 2030 across real estate, infrastructure, private equity and green bonds. This is in addition to €5 billion the firm has already invested in climate.
NN Group is seeking early-stage, development and greenfield investments for this €6 billion allocation, Marieke van Kamp, the firm’s head of private markets, told New Private Markets. “We can really make a difference” by “investing at the early stage or in development” for each of these asset classes, said van Kamp.
The €500 million real estate mandate, known as the Positive Impact Programmatic Venture, will aim to reach carbon neutrality for the properties’ operations by 2035 and reduce the properties’ landlord-controlled greenhouse gas emissions by 80 percent by 2030, according to a statement from NN Group.
“We want these assets to be of the highest Dutch standard, and you can only get that with new builds,” said van Kamp. “We want to be at the table at a very early stage, so we can potentially push the developers to make the buildings even more sustainable where possible.”
NN Group plans to hold these assets for at least 20 years, said van Kamp. “We aim to invest in them now and aim to keep investing in those assets in the future, to hold them for the long term in the portfolio. We do invest a lot in existing buildings, bringing them to higher energy efficiency and ESG standards, but this venture is really focused on new builds. We also wanted to focus it on affordable housing because there’s quite a housing shortage in the Netherlands. If we want to tackle that, we have to step into forward funding or new development projects.”
NN Group has a similar appetite in new developments and early-stage investments for impact additionality in its other private markets strategies. Within each of the firm’s private asset class allocations– real estate, private equity and infrastructure – NN Group has pockets of capital for which the firm is comfortable taking early-stage or venture risk. “We really want to use those pockets for climate action investments as well,” said van Kamp.
“For renewables, you can really make a difference if you create new stock. This comes with investing at the early stage or in the development,” said van Kamp. “If you invest into existing renewables, you don’t actually contribute to climate goals. Similarly, we are looking at companies between private equity and infrastructure – companies that further develop EV charging and battery systems. Those are relatively new and may still be venture capital. We really think that investing in those and helping those companies to grow is where we can make a difference.”
NN Group, which has assets worth €198 billion, has set a 2050 net-zero target across its portfolio. “ESG is in the DNA of the NN Group,” said van Kemp, adding that the organisation’s values of “clear [communication], care and [commit]ment”, apply “to our shareholders, our insurance policyholders and everyone that is related to the investments that we do – including our tenants. By investing into sustainable assets we not only attribute to our climate action goals but we strongly believe that in the long term these investments will be the most valuable.”