Dutch pension fund Pensioenfonds PGB (PGB) is one of the subscribers to the Sustainable Development Investment Asset Owner Platform (SDI AOP). The data, backed by some of the largest asset owners in the world, creates a standard for investing in the UN Sustainable Development Goals.
We spoke with Yvonne Janssen, Senior Sustainable Investment Portfolio Manager at PGB, to understand how the data is currently used at the pension fund and how the data supports PGB’s focus on increasing investments to the UN Sustainable Development Goals (SDG).
What exactly are PGB’s sustainability ambitions?
We believe that “PGB is more than money alone”. Our main SRI objective is to improve the risk-return profile while at the same time making a positive contribution to society through socially responsible investment choices. We can achieve a more sustainable future for participants in three ways: SDG-related investments, the application of ESG criteria and investment stewardship.
The aim is that the investments across our entire portfolio are socially responsible (ESG) and, if possible, to also have a positive social impact (ESG = Do No Harm and Impact = Do Good).
Are there specific SDGs that you are more focused on than others?
It’s very important that we take into consideration our participants’ wishes so back in 2018 and 2019, we conducted a survey asking them which goals they considered the most important. Out of this exercise emerged the following five SDGs.
- Good health and well-being (SDG3)
- Affordable renewable energy (SDG7)
- Decent work and economic growth (SDG8)
- Industry, Innovation and Infrastructure (SDG9)
- Action to combat climate change (SDG13)
When it comes to accelerating investment into SDGs, do you focus only on listed equities?
No. For fixed income, we focus on green and social bonds and in real estate infrastructure, and private equity we focus on relevant investment opportunities that contribute to the SDGs.
Why did you select the SDI AOP data?
We had heard about the SDI AOP platform and its associated taxonomy when it was publicly announced in 2020. Our peers, APG and PGGM, were not only defining and using the data; they understood the Dutch market. So, when we needed a solution that could show us how our existing listed equity portfolio contributes to the SDGs, we were confident that the SDI AOP dataset was the right fit for us.
How will you use the data and for what purpose?
Specifically, we wanted to see how our portfolio compared to our benchmark and the companies that are considered SDG contributors. For now, we will use the data primarily to report on our exposure to SDG investments, to make strategic investment choices and to define targets that support our ambition of having a positive contribution to society through our investments.
What is your existing exposure to SDGs and what are your targets?
According to our Sustainable Investment Report 2020, our current exposure is approximately EUR1.2bn, which is almost 4% of our total assets under management. We are currently working on our “Do Good Investment Policy” which will include our future targets. The SDI AOP will be integral in helping to shape that piece of work and to define what our increased level of exposure to SDGs will be in the equities space.
The Sustainable Development Investments Asset Owner Platform (SDI AOP) is responsible for the development and maintenance of the SDI taxonomy and guidance, SDI definitions and SDI classification methodology (www.sdi-aop.org). The SDI AOP consists of asset owners who invest in solutions which contribute to the UN Sustainable Development Goals. The SDI AOP uses revenues associated with a company’s products and services as starting points to classify which companies qualify as SDI.