Innovation

We continuously innovate in responsible investment on behalf of our clients. 

CO2 reduction

For example, we started to reduce the footprint of the equity portfolio a few years ago. We accomplish this by reallocating investments in the most CO2 intensive sectors - energy, utilities and materials - to relatively CO2 efficient companies. In our view, companies with high emissions are inadequately prepared for a low CO2 future and these companies are therefore gradually disappearing from the portfolio. We will keep the sector allocation unchanged, because we believe that all sectors will continue to play a significant role in a low CO2 economy. This reduction can act as a hedge against a possible decline in the value of investments with a large CO2 footprint.

Since the baseline measurement, the CO2 footprint has been reduced from 339 tonnes of CO2 per million dollars of company turnover to 239 tonnes of CO2 per million dollars as at 31 December 2018.  In the period from year-end 2017 to year-end 2018, this reduction went from 244 tonnes of CO2 per million dollars of company turnover to 239 tonnes. The decline has been lower than expected. This is mainly due to the CO2 data we use. Many companies and even entire sectors are gradually showing a higher CO2 intensity. The historical data, in contrast, show a steady decline. This means that there has been a trend break in recent years. Read more about this in our Responsible Investment Anual Report 2018.

Sustainable Development Investments (SDI)

We also sought cooperation with fellow investors and with universities at home and abroad to further develop the measurement of impact. To provide insight into the contribution made to the SDGs through the investments of our clients and to make this comparable with the investments of other investors, we worked together with pension administrator APG on standardising SDG impact investments: Sustainable Development Investments (SDIs). We have developed a standard for the definition and approach of SDIs, or investments with a market-based return, that make a substantial contribution to the SDGs. At the end of 2016, APG and PGGM published a statement with this definition and the taxonomy. In 2017, various international investors signed this statement, thus indicating that they are adopting SDI as the definition and standard. 

In 2018, we identified and listed the portfolio's contribution to sustainable development goals for the first time according to this taxonomystandard. At the end of 2017, we had invested € 33.8 billion on behalf of our clients in companies and projects that contribute to sustainable development. This was 15 percent of the total assets under management at the end of 2017. The results per SDG are shown below. For each SDG, an example is given of a company or project that contributes to achieving this development goal. Read more about this in the PGGM Responsible Investment annual report 2018.

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