BlackRock to adapt the EUR 4.5 billion developed market equities portfolio.
20 December 2021, Eindhoven, Amsterdam, Zug — Philips Pensioenfonds, in collaboration with analytics and index provider Qontigo and asset manager BlackRock, announces the launch of the iSTOXX® PPF Responsible SDG Index.
This index solution will serve as the new benchmark for its developed market equities portfolio. Philips Pensioenfonds has decided to support the United Nations’ Sustainable Development Goals (SDGs) after surveying more than 5,000 of its members to understand their expectations. The survey results clearly showed that members considered engagement and voting important but also wanted to invest more in companies that contribute to a sustainable future by aligning with specific SDGs most important to them:
- Good Health & Well Being (SDG 3)
- Sustainable Cities & Communities (SDG 11)
- Responsible Consumption & Production (SDG 12)
- Climate Action (SDG 13)
The iSTOXX PPF Responsible SDG Index is designed as a broad equity benchmark which will be used for a EUR 4.5 billion mandate managed by BlackRock. This equity portfolio is almost 20% of the total assets of the fund.
“This new custom benchmark enables Philips Pensioenfonds to align the investment portfolio with the sustainability preferences of our beneficiaries while retaining a diversified portfolio with a low cost implementation. Because the SDG profile materially improved and this portfolio makes up almost 20% of our total AUM it represents an important step in aligning our investments to the SDGs. In the future, we seek to integrate the SDGs in other asset classes and portfolios too.”Anita Joosten, Chief Investment Officer of Philips Pensioenfonds
The index is designed to increase the overall portfolio weighting of companies which sell products and services with positive contributions to the four selected SDGs by at least 20%, increasing the exposure from 15% to 35%. The portfolio will also reduce greenhouse gas emissions per euro of revenue by 30% compared with the standard benchmark. The indices were built using multiple ESG data sets, including the Sustainable Development Investments Asset Owner Platform (SDI AOP) data. This data set classifies companies based on the share of their revenues from products & services that contribute to specific SDGs.
“We are pleased to be helping Philips Pensioenfonds on their journey to linking their investment portfolio to the Sustainable Development Goals. Together, we have come up with an innovative approach that achieves meaningful SDG alignment without sacrificing on cost or risk/return profile. It clearly shows that Dutch pension funds are again at the forefront of using their portfolios to combine positive sustainable as well as financial outcomes for their beneficiaries.”Monique Donders, Country Head BlackRock Netherlands
In addition to significantly increasing exposure to companies which support specific UN SDGs, the STOXX Responsible SDG Index excludes companies that are obstructive to these goals using a data set from ISS ESG. The index also incorporates additional ESG screens and climate considerations, which reduce the carbon intensity of the portfolio. The index uses Qontigo’s suite of Axioma portfolio construction solutions to achieve multiple investment and sustainability objectives while maintaining market-like exposure with low tracking error and low turnover, producing a cost-effective sustainable index solution for participants.
“The integration of multiple sustainability objectives in a risk-controlled investment framework requires careful consideration of the inherent tradeoffs. We take a consultative and collaborative approach in working with clients and partners to ensure we are able to develop index solutions targeted at achieving specific outcomes. The result of the partnership with BlackRock and the Philips Pensioenfonds is a great example of how asset owners, managers and index providers can come together to design responsible investment strategies that are aligned to the UN SDGs.”Hamish Seegopaul, Managing Director for R&D ESG and Quantitative Indices, Qontigo
Note for editors
More information on the methodology applied can be found in the iSTOXX Methodology Guide on page 686.
- Susanne Scheepers – Spokesperson Philips Pensioenfonds | +31 (0)40 273 05 69 or firstname.lastname@example.org
- Janneke Herwaarden – Spokesperson Philips Pensioenfonds | +31 (0)40 273 05 59 or email@example.com
- Andreas von Brevern – Spokesperson Qontigo | +49 69 2 11 14284 or firstname.lastname@example.org
- Julian van de Wetering – Spokesperson BlackRock | +31 (0)6 15 37 76 90 or email@example.com
About Philips Pensioenfonds
Philips Pensioenfonds is the administrator of the pension plans for current and former employees of its two associated companies (Koninklijke Philips N.V. and Signify) in the Netherlands. This involves administering pension rights and entitlements and investing and managing the pension fund’s assets. With Assets under Management of about EUR 23 billion, PPF is one of the main corporate plans in the Netherlands.
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Qontigo is a leading global provider of innovative index, analytics and risk solutions that optimize investment impact. As the shift toward sustainable investing accelerates, Qontigo enables its clients—financial-products issuers, asset owners and asset managers—to deliver sophisticated and targeted solutions at scale to meet the increasingly demanding and unique sustainability goals of investors worldwide.
Qontigo’s solutions are enhanced by both our collaborative, customer-centric culture, which allows us to create tailored solutions for our clients, and our open architecture and modern technology that efficiently integrate with our clients’ processes.
Part of the Deutsche Börse Group, Qontigo was created in 2019 through the combination of Axioma, DAX and STOXX. Headquartered in Eschborn, Germany, Qontigo’s global presence includes offices in New York, London, Zug and Hong Kong.
STOXX Ltd. is Qontigo’s global index provider, currently calculating a global, comprehensive index family of over 13,000 strictly rules-based and transparent indices. Best known for the leading European equity indices EURO STOXX 50, STOXX Europe 50 and STOXX Europe 600, STOXX Ltd. maintains and calculates the STOXX Global index family which consists of total market, broad and blue-chip indices for the regions Americas, Europe, Asia/Pacific and sub-regions Latin America and BRIC (Brazil, Russia, India and China) as well as global markets. STOXX is the administrator of the STOXX® and DAX® indices under the European Benchmark Regulation and exercises control over all benchmark administration processes within Qontigo. STOXX indices are licensed to more than 600 companies around the world as underlyings for Exchange Traded Funds (ETFs), futures and options, structured products and passively managed investment funds.
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