NETHERLANDS - PGGM, the €90.8bn pension asset manager for the care and welfare sector, intends to increase its direct engagement with companies despite initiating more than 80 direct engagement projects on environmental, social and governance (ESG) factors in 2009.
Details from its Responsible Investment Annual Report 2009 revealed the company voted on over 40,000 agenda items at the meetings of 99% of the 4,200 companies held in its investment portfolio. This is in addition to dialogues held with more than 500 companies that led to 320 successful engagement results.
PGGM carried out 81 direct engagement projects in 2009, with the remainder carried out on its behalf by F&C. The direct engagement approach led to 17 successes, while F&C's activities produced 317 successful outcomes from 1,528 projects targeted at 495 companies.
The asset manager said it paid particular attention to resolutions submitted by shareholders and ESG aspects such as better company reporting on climate change policy and activities. F&C also highlighted its involvement in "intensive discussions" with members of the European Parliament on the need for a strong climate policy ahead of the UN climate discussions in Copenhagen last December.
Other issues that triggered engagement work over the year included human rights issues in Burma and/or Sudan, other environmental issues such as the Tar Sands projects in Canada, which is the subject of a number of shareholder resolutions at oil company AGMs in 2010, and corporate governance relating to remuneration policies.
Despite the current progress and continued integration of the organisation's ESG policy across existing investment processes, PGGM said further targets for 2010 included a 100% survey of ESG factors across all investment activities - the second stage of its integration process - and a continued high percentage of voting.
It also confirmed it was aiming for "further growth in the number of self-initiated engagement projects", alongside continued attention on transparency with regard to its responsible investment policy and the results it achieves.
Johan van der Ende, chief investment officer at PGGM, said: "We consciously take account of the impact of ESG aspects in our investment activities and are actively integrating these factors in all our investment processes.
"We made major progress with this in 2009, partly through our responsible investment for real estate policy. Transparency is an integral part of responsible investment. It all starts with accountability."
During the launch of the report in the Netherlands earlier this month, PGGM confirmed that it was looking at the possibility of scaling back investments in equities or adopting an exclusion policy for the 'worst-in-class' in an effort to better understand its portfolio and implement an active engagement policy. (See earlier IPE article: PGGM proposes equity cutback for engagement reasons)
The alternatives will be presented to members in June, with any changes to the investment structure expected to be in place by January 2011.