Sustainable and responsible investing
A good pension in a livable world
We as a pension fund also assume our social responsibility. SPF aims to offer a good pension to all members, now and in the future. A pension that enables them to enjoy their retirement in a livable world.
The Board of SPF considers sustainability to be a major aspect of the investment philosophy and a full component of our investment principles. For SPF, our Sustainability Policy is a way of furthering sustainable growth in the world. Numerous scientific studies have strengthened our belief that sustainability does not need to be at the expense of return on investments. On the contrary, we can take better-informed investment decisions by incorporating information about people, the environment, and good corporate governance in our policy. Certainly because we are investing for the long term.
You can read a brief outline of how we are addressing this and what we achieved here.
In 2022, we asked our members what they think about our sustainability policy. With that input, our policy has been further shaped. You can read the main findings of this member survey here.
If you would like to receive detailed information about our Sustainability Policy, please click here.
Or if you would like to know what sustainable investing means, watch this general short video (click on image) on ‘Duurzaam beleggen: het nieuwe normaal’ (Sustainable Investing: the new normal).
What does SPF want to achieve with sustainable investing?
End of 2018, SPF and other pension funds signed the Covenant on International Socially Responsible Investment by Pension Funds. The signatories of this Covenant have opted for an approach that takes the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights as the basis for identifying, prioritizing, and addressing Environmental, Social, and Governance (ESG) risks.
SPF’s Board further developed the fund’s sustainability policy in 2022. For instance, we started measuring the carbon footprint of part of our investment portfolio (in the asset categories shares, investment grade credits, and US high yield). In 2023, the fund chose a second focus theme, 'Circularity’, and further tightened its exclusions policy. In the context of European sustainability legislation (SFDR), we also decided to report on a set of twenty different sustainability indicators from the second quarter of 2024.
We focus on specific social developments that are important to members and that form a high risk for the investment portfolio. It is against this background that we aim to work particularly on the sustainability theme of climate change. The focus of this theme is on two SDGs: SDG 7 (affordable and clean energy) and SDG 13 (climate action). For the ‘Circularity’ theme, the focus is on two other SDGs, namely: SDG 6 (clean water and sanitation) and SDG 12 (responsible consumption and production). The ‘Circularity’ theme will first be set out in more detail before being implemented in the portfolio.
Pillars as a Basis
The following six pillars are key in the SPF Sustainability Policy:
The objective for proactive engagement is to simultaneously encourage multiple companies (often within a given sector) to make further improvements. Reactive engagement focuses on influencing one company. For companies that do not respond satisfactorily within the prior set period, SPF has established an escalation policy which may lead to divestment in the company concerned. SPF has outsourced engagement to Columbia Threadneedle Investments (CTI). CTI acts as an engagement party on behalf of a number of institutional investors. Our engagement program focuses on real estate and other shares and holdings in the company bond portfolios investment grades and high yields.
In 2023, CTI held discussions with companies from SPF’s portfolio in 39 countries. This led to a positive change 74 times. CTI achieved these results on topics including climate change, employment conditions, company governance and health.
SPF uses a specific voting approach to monitor material affairs of all listed companies and real estate companies in which we invest. Material affairs are affairs that will probably have a considerable effect on the capacity of the company to create long-term value. Our policy for good governance focuses on protecting SPF’s interests as a shareholder while at the same time living up to our responsibility as a shareholder.
CTI also implements our voting policy.
In total, SPF voted at 930 meetings in 2023. We voted 68 times on climate-related proposals, of which 14 concerned proposals regarding the transition as a consequence of climate change. To see how SPF voted, click here.
By making our voice heard during shareholder meetings, we can influence the policy and the quality of the management of the companies in which SPF has shares.
SPF does not invest in companies that fail to act in accordance with the UN Global Compact’s Ten Principles. We also exclude producers of controversial weapons such as nuclear, biological, and chemical weapons, depleted uranium munitions, and white phosphorus munitions. SPF also excludes companies that are involved in tobacco production (turnover limit >0%) and companies involved in coal mining and extracting oil from tar sands (turnover limit >5%). We also exclude companies and countries that conduct activities that the United Nations, the European Union, or the Dutch government deem unacceptable. These are mainly issues concerning human rights and weapons. To identify companies and countries for exclusion, Morningstar Sustainalytics carries out screening on behalf of the fund to establish the companies and countries in which SPF should not invest. Morningstar Sustainalytics screens both developed and emerging markets on the above criteria.
At end 2023, SPF excluded 174 companies and 14 countries from its investment universe. By way of comparison: at end 2022, 106 companies and 14 countries in total were excluded.
SPF publishes an Annual Report to ensure transparency about the sustainability policy and how it is implemented. This report describes our sustainability efforts in that year and which results were achieved with respect to sustainability in this area. We also publish an annual overview of the outcomes of the overall investment portfolio on our website as well as the results of votes at shareholder meetings and the engagement policy. You will also find our sustainability policy there. Additionally, the SPF Newsletter and the website regularly feature items on the sustainability policy.
SPF signed the Covenant on International Socially Responsible Investment (‘IMVB-covenant’ in Dutch) in 2018. In doing so, we pledged to embed the OECD guidelines and UN Guiding Principles in our policies, outsource activities to external service providers, and monitor and report on this topic. We do this by means of the SPF Annual Report.
The SPF brochure Socially Responsible Investment and Corporate Governance provides more information on all subjects.
Reporting
SPF publishes an Annual Report (in Dutch) on progress to ensure transparency of the Sustainability Policy and how it is implemented. In this report, we indicate how we handled sustainability in that year and which results were achieved with respect to sustainability.
In the spirit of openness about the Sustainability Policy and how it is implemented, SPF publishes its Sustainability Policy, Engagement Reports (in Dutch) and Vote Summary Report on the website.
Sustainability on the agenda
SPF continues to work on a responsible sustainability policy. Examples of activities mentioned by the Board with respect to sustainability are:
- Evaluating the exclusion policy for countries and companies based on the fund’s sustainability ambition and the preferences indicated by members in the latest member survey;
- Setting policy for a follow-up process with a company when talks and negotiations do not produce the desired results for people and the environment;
- Exploring opportunities for allocation of investments into the chosen SDGs in the investment portfolio;
- Further implementing the requirements of the European sustainability legislation (SFDR);
- Increasing support for sustainable and responsible investment among members by reporting more on our sustainability activities and results.