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 2024.
For instance, SPF began drafting a statement that reflects the main adverse effects of investment decisions on sustainability. Reduction of the carbon footprint of part of our investment portfolio remains an important goal. The fund also further tightened its exclusion policy. In 2024, a member survey prompted the exclusion of, for example, the gambling industry (depending on a revenue threshold >50%) from investment.
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:
SPF endorses the OECD guidelines for multinational companies and the UN’s Guiding Principles on Business and Human Rights. The fund focuses on specific social developments that are important to members and that form a high risk for the investment portfolio. Against this background, SPF aims to work particularly on the sustainability theme of climate change, focusing on two so-called Sustainable Development Goals (SDGs), namely: SDG 7 (affordable and clean energy) and SDG 13 (climate action). The ‘Circularity’ theme is focused on two 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.
Where possible, SPF manages and evaluates investments according to ESG factors. ESG stands for Environmental, Social and Governance. The fund integrates ESG aspects in the various investment categories in which SPF invests and includes them in investment decision-making.
SPF has an active engagement programme. The fund aims to encourage companies to take steps with respect to social and sustainability issues. This is done in two ways: proactively and reactively.
The objective of proactive engagement is to simultaneously encourage multiple companies – often sector-wide – to make further improvements. Reactive engagement focuses on influencing one company. For companies that do not respond satisfactorily within predetermined 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), which acts as an engagement party on behalf of several institutional investors. The SPF engagement programme focuses on holdings in real estate and other shares and holdings in the company bond portfolios investment grades and high yield.
In 2024, CTI held discussions with companies from SPF’s portfolio in 25 countries. This led to positive changes (achieved milestones) 51 times. CTI achieved these milestones on topics including climate change, working 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 the fund invests. Material affairs are affairs that will probably have a considerable effect on the company’s capacity to create long-term value. SPF’s policy for good governance focuses on protecting interests as a shareholder while at the same time living up to its responsibility in that role. As with the engagement policy, CTI also implements SPF’s voting policy.
In total, SPF voted at 872 meetings in 2024. The fund voted some 60 times on climate-related proposals, 15 of which were proposals regarding the transition as a consequence of climate change.
SPF does not invest in companies that fail to act in accordance with the United Nations’ Ten Global Compact principles. The fund also excludes 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%), companies involved in coal and oil extraction from tar sands (turnover limit >5%) and companies working within the gambling industry (turnover limit >50%). SPF also excludes 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 the fund should not invest. Morningstar Sustainalytics screens both developed and emerging markets based on the above criteria for SPF.
At end 2024, SPF excluded 217 companies and 14 countries from its investment universe. At end 2023, 174 companies and 14 countries were excluded. The increase in the number of excluded companies was a result of the expansion of the exclusion policy, as explained above.
SPF publishes an Annual Report to ensure transparency about its sustainability policy and how it is implemented. The report sets out how SPF handled sustainability that year and the fund’s achieved results in this area. SPF also publishes an annual overview of the outcomes of the total investment portfolio on its website as well as the results of votes at shareholder meetings and the engagement policy. The SPF sustainability policy can also be found there. Finally, the SPF Newsletter and the website regularly feature items on the sustainability policy.
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.