Digital highways for pensions and society

From mobile networks and fibre-optic cables to data centres, without these ‘digital highways’ our society would come to a standstill. For PGGM and PFZW, these are not just investments. They contribute to stable returns, portfolio diversification, and a resilient society ready for the future.   

From traditional to new infrastruct
ure Traditionally, we invested our clients’ capital in roads, bridges and energy networks. These remain important domains. Over the past decade, however, a new pillar has emerged: digital infrastructure. 

We started with mobile towers, the masts on which telecom providers install their antennas. We then expanded into fibre optics, and today we also invest in European data centres. These investments share the same characteristics of traditional infrastructure: long-term contracts, protection against inflation, and clear social value. At the same time, it is a new and rapidly evolving field, where change happens at an incredible pace. 

A digital society needs strong connections
Reliable digital infrastructure is not merely convenient, it is essential. During the COVID-19 pandemic, for instance, hospitals were able to manage patient flows more effectively by sharing data centrally and digitally. Such progress depends on fast and reliable connections.

One example is our investment in Eurofiber, a provider of fibre-optic connections for businesses and institutions. Today, 84 per cent of all Dutch hospitals are connected to Eurofiber’s network. PGGM itself also makes use of similar services. Eurofiber rightly describes itself as an enabler of the digital society: without fibre, secure data processing or effective remote collaboration would not be possible.

We later extended our investments to consumer fibre (fibre to the home), including projects in Denmark. This carries an important social dimension: everyone, including those in rural areas, should have access to high-speed internet. This aligns with SDG 9: Industry, Innovation and Infrastructure. Through these investments, we help to build robust and resilient infrastructure, promote sustainable industrialisation, and foster innovation that connects people and businesses, strengthening economic growth and wellbeing.

Data centres as engines of digitalisation
More recently, we have invested in European data centres, which provide the computing power that keeps modern society running, from healthcare to mobility.

Although data centres are sometimes viewed negatively because of their high energy consumption, they are essential to the digital transformation and therefore the greening of our economy. At the same time, the sector is working hard to become more sustainable. Closed-loop water systems now allow for 100 per cent reuse, and residual heat is increasingly being used for district heating. As an investor, we actively support and promote these innovations, as we believe participants ultimately prefer a ‘green cloud’.

Balancing risk and return |
Digital infrastructure is still a relatively new field compared with traditional infrastructure or energy, which means the risks can be higher, for example because of rapid technological change or shifting regulation. 

Because we work with in-house sector teams, we understand the market and can assess which propositions are sound. We do not pursue every opportunity that arises but focus on investments that fit within our 3D approach, which gives equal weight to return, risk and sustainability. 

The open access model plays an important role in this approach. We prefer to invest in infrastructure that can be shared by multiple users, making the use of towers, fibre networks and data centres more efficient and reducing the need for providers to build separate networks. This delivers both solid returns and a meaningful contribution to sustainability. 

Opportunities and challenges ahead
In the coming years, digitalisation will only become more important. Developments such as artificial intelligence, the rising demand for data and discussions about European cloud sovereignty will create both opportunities and challenges.

One example is the energy sector, where digital infrastructure can help make power grids smarter and keep supply and demand in better balance. Achieving this will require innovation and close cooperation between the public and private sectors. Geopolitics will also remain a factor. Europe, the United States and China each have their own vision for data and cloud services, and how we respond to these differences as a society will shape the role investors can play. 

This role is a vital one. By investing in mobile towers, fibre and data centres, we help build the digital highways the Netherlands and Europe need. In doing so, we contribute to stable pensions for our participants and to a society that is connected, resilient and ready for the future.