NETHERLANDS - APG, the newly-created asset manager and administrator of €218bn Dutch pension fund ABP, has divested its shares of just one company since stepping up its environmental, social and governance (ESG) policy last year.
In its first report on responsible investing, published alongside its annual report last week, APG says it decided to sell its shares in Panalpina, a Swiss transport and logistics company - under investigation for suspected bribery in the Nigerian oil industry - as a result of discussion about ethical issues.
According to Rob Lake, head of APG's ESG efforts, Panalpina is the only divestment APG has made as a result of such discussions since implementing its earlier planned ESG campaign subsequent to last year's wide public criticism in the Netherlands of pension funds not being aware enough of ethical issues in their investment process.
Rob Lake told IPE in an interview following the report APG has recently started discussions with around 15 companies "from the starting point of there being a known big issue that we are investigating and talking to them about".
Lake declined to reveal any of the 15 or so companies APG has approached with the objective of changing policies, arguing APG, from its shareholder position, can only exercise influence within a trust base.
"We don't think that as a first step making the names of the companies public will help us to build that trust and to get a company into a constructive discussion with us," he said, adding however APG will make the names of these companies public in due course.
In its report, the company also published a list of 24 companies with whom APG discussed ESG issues ranging from conflict diamonds, to child labour, including companies such as Bulgari and Ahold. Panalpina is also mentioned in the list.
"That table is an example of discussions with companies that are part of our ongoing investment process", said Lake, explaining APG has discussions with companies as part of the routine process of running a bottom-up stock-picking fund.
"In an ESG context, we add to the existing process and routine some discussion about sustainability issues," Lake added.
The starting point is not necessarily knowing a company has a problem, but rather APG identifies important issues within a sector, while engaging with companies to understand how it deals with them, he said.
Lake concludes it is also important to note that APG has excluded 15 companies under its policy of not investing in companies that make antipersonnel landmines or cluster bombs. "The Panalpina decision was not part of a campaign but an investment decision in which ESG issues - in this case ethical controls on bribery - played a central part."
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