The €45bn Dutch metal industry scheme PME said it will improve its ESG policy by linking 10% of its assets directly to United Nations sustainability targets over the next five years.
Together with the €382bn civil service scheme ABP and the €185bn healthcare pension fund PFZW, PME is the third large scheme in the Netherlands linking a substantial part of its investment portfolio to the UN’s 17 Sustainable Development Goals.
Eric Uijen, PME’s chairman, emphasised that the scheme’s return target would remain the leading principle for its investment policy.
“A proper return against manageable risks and acceptable costs will be required for all investments,” he said.
Marcel Andringa, executive trustee for asset management, said that setting concrete goals was a big step in PME’s responsible investment policy. The sharpened focus on ESG applies to equity, bonds, property, and private equity, according to PME.
The sector scheme indicated that it would in particular focus on energy transition, waste, affordable housing, and access to financing.
Andringa estimated that PME had already invested 3% into assets linked to the UN goals, including renewable energy, green bonds, and forestry, as well as real estate and equities that apply specific sustainability criteria.
Last month, the metal scheme announced that it would reduce its portfolio’s carbon emissions by 25% within five years.
Responding to PME’s decision, its €67bn sister metal scheme PMT said it already used the UN’s Sustainable Development Goals as a guideline for its investments, but that it didn’t see added value in setting a quantative target.
PMT added that it also focussed on energy transition, access to financing, and waste.
As sustainable investment is still in its infancy, pension funds are co-operating over measuring the impact of such investments.
PME is working together with, among others, pension managers PGGM and APG in a working group as part of a sustainability platform of supervisor De Nederlandsche Bank. The working group is developing uniform impact indicators.