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PGGM to measure sustainability of institutions' pension assets

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  • PGGM to measure sustainability of institutions' pension assets

NETHERLANDS - Dutch pension fund service provider PGGM is to develop a method of measuring the sustainable return of pension assets.

In doing so, PGGM aims to provide its institutional customers with an overview of the extent to which their investment portfolios will in time contribute to the "preservation of the world".

Marcel Jeucken, managing director for responsible investments at PGGM, said: "Not only do we wish to implement the most responsible investment policy for our customers, but we also want to encourage our financial partners to make the Dutch financial sector sustainable. By doing so, we hope to contribute to the recovery of public trust in the financial sector."

PGGM plans to start its first pilot projects on the assessment of sustainable returns this year.

The fiduciary manager detailed in its 2011 Responsible Investments Annual Report - published earlier this week - that its mandates for targeted environment, social and governance (ESG) investments grew to €4.7bn last year, up from €3.7bn in 2010.

At shareholders' meetings, PGGM voted against the reappointment of the executive boards of BP and TEPCO due to a lack of confidence after the oil platform explosion in the Gulf of Mexico and the meltdown in the Fukushima nuclear power station.

PGGM also held talks with mining companies to encourage them to reduce their environmental impact and improve working conditions; with the producers and purchasers of sustainable palm oil; with undertakings involved in water-dependent sectors in China and India; and with Shell about transparency in its activities.

It conducted a number of long-term legal proceedings on behalf of its customers and strengthened its advisory council for responsible investments by adding a fifth adviser.

In addition, PGGM introduced a sector-oriented approach in 2011, which addresses all ESG risks and opportunities in companies within a sector.

It also excluded a total of 40 companies and the government bonds of eight countries last year. Libya was added to the list of excluded government bonds in 2011, in response to events in the Middle East.
 
Furthermore, PGGM organised a meeting of experts with the ultimate objective of having a code of good corporate governance developed in the US, was actively involved in the climate negotiations in Durban, South Africa, and, in cooperation with other investors, initiated the Farmland Principles for responsible investment in agricultural land.

PGGM currently works on behalf of six pension funds, managing around €120bn of pension assets.

The report can be found here.

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