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ESG integration

PGGM defines ESG integration as the structural and systematic involvement of ESG factors in existing investment processes.

ESG factors are factors that (can) have a significant impact on the underlying investment because, for example, they reduce risk, improve revenue or save costs. To a degree, these factors have not yet been priced in.

ESG factors influence the investment returns of our clients in the longer term. For this reason, increasingly stringent legal and regulatory requirements are being imposed for screening for these factors as part of risk management.

PGGM uses the Materiality Map of the Sustainable Accounting Standards Board (SASB) as a basis for consistent assessment of the importance of individual ESG factors in specific sectors and investments.

Genuine integration of ESG factors is no simple task. Apart from the standardisation, there is also much to be gained with the improvement of the data that companies provide on their environmental policy, social conditions and good corporate governance. A number of these factors are normative, such as respect for human rights. ESG integration requires an open mindset of investors and the necessary skills. The implementation can vary from one investment category to another. Read our guidelines for responsible investment for different investment categories and in our Integrated Annual Report