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Active ownership in public markets

As an investor with a long-term horizon, PGGM is a shareholder in approximately 2,700 listed companies. We actively use our influence as a shareholder to achieve improvements in the ESG field, thereby contributing to the quality, sustainability and continuity of companies and markets. We do this in the belief that this ultimately contributes to a better financial and social return on investments for our clients.

Minimum requirements for equity ownership

Equity ownership is not without obligations, since institutional investors worldwide increasingly have to meet minimum requirements stipulated by legislation and regulations. For PGGM and its clients, these minimum requirements are set out in the applicable Dutch laws and regulations and in the Dutch Corporate Governance Code. Through our behaviour as an active shareholder in all markets in which we invest, we aim to set an example for other private and institutional investors.

For the implementation of active equity ownership, PGGM adheres to the standards and principles of various organisations, such as:

  • The active equity ownership principle set out in the Principles for Responsible Investment (PRI);

  • The Eumedion Best Practices for Engaged Share-Ownership;

  • The principles of the UN Global Compact;

  • The Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD) and the United Nations Guiding Principles on Business and Human Rights (UNGP).

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Engagement with companies and market parties

Through dialogue we aim to achieve ESG-related improvements.

On behalf of our clients, we call companies and market parties to account for their policy and activities. Through this dialogue we want to achieve ESG-related improvements. Committed equity ownership requires perseverance and calls for the use of high-quality knowledge to be able to conduct fruitful dialogue with a company’s management and exert maximum influence. PGGM has invested in this for years, with good results. We believe, and are not alone in thinking this, that companies benefit from critical, active shareholders who keep companies on their toes and encourage more steering towards sustainability. In this context, we work to form coalitions for engaging in this dialogue jointly with other institutional investors. This increases our impact because the total share concerned is greater.

The sheer number of companies in which PGGM invests necessitates choices as to with which companies we can engage in active dialogue. After all, there are too many to be able to effectively engage in dialogue with everyone. We aim to create focus in our engagement activities. To this end, we have worked with our clients to set up engagement programmes aimed at aspects within the following topics: Climate change, pollution and emissions; Water scarcity; Health care; Guaranteeing human rights; Good corporate governance; and a Stable financial system.

We make a selection based on a number of criteria. The first selection criterion is the relevance to our clients and their participants. The second criterion is the role that PGGM can play as an investor. Do we have the knowledge in house? We also look at whether the engagement can actually have an impact - is the company open to dialogue? A larger equity stake means more input and, with that, more opportunity to influence a company. The final criterion is the expected contribution to value creation in the long term, for the company, the shareholder and society alike. These criteria are used as a basis to define engagement projects, which are in turn based on data and research by external suppliers. We adopt objectives and timelines in advance for each engagement project. We measure progress on a quarterly basis in this context.

Corporate engagement in 2019

In our dialogue with companies, we focus on businesses where we see ESG opportunities and risks. This can range from setting up a strategy for access to health care in developing countries to implementing a sound human rights policy. The focus is on companies that have a halo effect within their region, sector or supply chain. A few examples of companies with which engagement was conducted or results were achieved in 2019 are given below.


A fine example of a company that is doing a lot of good in improving access to health care and at the same time often finds itself under fire is Swiss pharmaceutical company Novartis. This company has for years scored very well on the so-called Access to Medicines Index (to which PGGM is a signatory), a ranking of companies rated for, among other things, their policy and strategy for improving access to medicine in developing countries. Novartis has in this context been (rightly) complimented for years for programmes like ‘Novartis Access’ (in which some 15 medicines are made available for $1 dollar per month in many poor(er) countries) and the implementation of the so-called ‘Novartis Access Principles’ (in which accessibility and affordability is already included in the development phase for certain medications). Despite all these excellent projects, Novartis also frequently finds itself in the news because of the price of certain medicines (such as Zolgensma, a pioneering and extremely effective, but very costly, medicine against Spinal Muscular Atrophy (SMA)) and alleged bribery scandals (the 2018 scandal involving Greek politicians, for instance). We see and acknowledge these significant contradictions and therefore broach these issues in our talks with Novartis, with the aim of steering towards improvements.


In the Netherlands, in relation to corporate governance we work together with other large investors as part of Eumedion. PGGM is a lead investor for a number of financial companies because we believe that a healthy financial sector is important. ASR is one of the companies with which with we had intensive contact during 2019, specifically around the annual shareholder meeting that took place in May. One of the topics we discussed in 2019 was ASR’s new remuneration policy. We were involved in the process early, which gave us the room to provide feedback on the plans. The outcome is a remuneration policy that is in line with our expectations. The fixed salary is sufficient remuneration for directors for performing their position and for that reason, it was decided not to grant any variable remuneration. The targets are also clear now, and it has been agreed how much the salary/remuneration can increase at a maximum in the coming years. This takes into account the increase in pay throughout the rest of the organisation. We are pleased with the result - especially with the way in which ASR carefully discussed the new plans with all the parties involved.

CBS Corporation

PGGM engaged with CBS in 2018 in collaboration with the Coalition of Six, a coalition of Dutch, British, Canadian and US investors (with a joint value of 2.5 billion USD). This coalition focuses on the composition and functioning of the management boards of large US companies. Chairman/CEO of CBS Corporation, Mr Leslie Moonves, resigned from his board position in 2018 after accusations of sexual harassment and abuse. The roles of CEO and chairman were definitively split in 2019 and new board members were appointed. The company also decided to make the composition of the senior management significantly more independent by replacing six long sitting directors with independent members. Moonves was also denied a generous exit package, at the insistence of PGGM and other investors.

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Engagement in relation to incidents

Companies: assess your human rights risks

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In addition to engagement in relation to the topics mentioned above, PGGM also engages with companies on incidents. [1] The seriousness of the situation is an important selection criterion in this context. We also conduct dialogue with companies that commit serious violations of international standards in relation to human rights, society, labour and the environment. We ask these companies to put a stop to the violations, to ensure remedial measures for the victims (people and/or the environment) and to take measures to prevent a re-occurrence of such violations. We receive input from data provider Sustainalytics to determine which companies commit these violations. See an example below of engagement in relation to an incident from 2019.

  • 1 We have outsourced some of our engagement activities to Sustainalytics.


PGGM invests in Vale, a mining company that operates primarily in Brazil. In January 2019, a breach occurred in one of the company’s dams near the Brazilian town of Brumandinho, resulting in a mudflow in which 256 people lost their lives and 14 people are still missing. An incident had also taken place in 2015, near a dam in Mariana, Brazil, involving Vale, in which 19 people died. In October PGGM started talks with a delegation from Brazil, which included victims from the Brumandinho disaster.

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Market engagement in 2019

Access to health care in exceptional times

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It is important for a pension investor that the government and market parties agree on rules that help ensure that good pensions can also be paid out in the long term. Engagement with policy-makers and regulators is therefore part of our role as asset manager. We talk with policy-makers and sector organisations about reliable and efficient regulations and on the development of standards in a number of areas. A few examples of market engagement in 2019 are given below.

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Global voting guidelines PGGM

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By voting at shareholder meetings of listed companies, we exert our influence as shareholder on the companies in which we invest on behalf of our clients. As a long-term investor, voting allows us to influence the direction the company takes on a number of fronts: strategic, financial and societal. It literally gives us a voice in important decisions by the management of companies.

As a basis for the voting behaviour, every year, together with clients, PGGM draws up the PGGM Voting Guidelines, which lay down our vision in relation to common voting items at shareholder meetings. Given the number of shareholder meetings, our voting is largely automated. The starting point is that we vote as advised by our voting service provider (ISS). These recommendations are based on the PGGM Guidelines. We actively monitor these voting activities based on multiple voting service providers and sources. We vote on the most relevant resolutions ourselves. For each company, PGGM publishes its voting record on a website.

In cases that arise, PGGM also addresses AGMs to reinforce our vote and publicly engage in debate with the companies in which we invest. This is especially the case for Dutch companies. Thanks to our scale as a relatively large investor, we have actual voting power.

PGGM also submits shareholder proposals itself or in cooperation with other investors when we want to spur a company to take action. We regard voting rights as an important part of our engagement and vice versa. Voting rights can, for instance, be used to further flesh out a topic on which engagement has been pursued, or as an escalation strategy to translate lagging engagement progress into a vote against a proposal (for example, a vote against the reappointment of a director).

Making our voice heard at British Petroleum

At the Annual General Meeting (AGM) of shareholders of British Petroleum (BP), there were two climate resolutions on the agenda, one calling for more transparency (submitted by the CA100+ partnership) and one calling for firm climate objectives (submitted by Follow This). We voted for the resolution calling for transparency and abstained from voting on the resolution calling for firm objectives. The main reasons for not voting for firm climate objectives were:

• We believe that limiting the supply of fossil fuels - which Follow This is implicitly asking for - is not the solution for the climate problem. As long as demand for fossil fuels continues, it is not worthwhile or reasonable to prohibit one or a few companies from supplying these fuels. That shifts the problem from one provider to another in a way that does not reduce emissions, but does reduce the market share of the business.

• It is unwise for any company - or for any investor, for that matter - to prepare for just one scenario, especially when the uncertainties (in terms of policy, technology and consumer behaviour) are considerable, and lie largely outside BP’s control.

Like Shell and a few other European energy companies, BP is a frontrunner in the energy sector. BP has been working on the energy transition for some time and wants to play a leading role in the process. In February 2020, the new CEO announced the new strategy: Reimagining energy, Reinventing BP. We believe that in future votes as well, BP’s management deserves investors’ trust and support in implementing this strategy.

Voting in figures

In 2019, we voted at 4,220 meetings of listed companies in which assets of our clients are invested. Based on our clients’ voting policy, over 45,000 proposals were voted on. The figure below shows in which regions and on what topics we voted in 2018.

Distribution of shareholders’ meetings by region in 2019

We account for each company's vote.

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We want to avoid making investments that are deemed unacceptable to our clients. This is why, in accordance with the PGGM Implementation Guideline, we exclude from the PGGM funds and internally managed mandates any companies that are involved in controversial weapons and tobacco. We also do not invest in government bonds of countries that are subject to sanctions of the UN Security Council and/or the European Union (EU). We can also exclude companies in the event of heightened ESG risks. In such instances, we first attempt to realise improvements by engaging in a dialogue with the company.

If clients wish to apply an even stricter minimum standard for their investments, PGGM will facilitate its implementation. If the participants in the PGGM funds jointly agree on additional exclusion criteria, PGGM will generally apply these to all relevant PGGM funds. In 2013 it was decided to exclude tobacco companies from investments in the PGGM funds. In concrete terms this means that companies engaged in the production of tobacco and/or tobacco products (such as cigarettes, cigars, chewing tobacco, etc.) have been excluded. If the participants reach no agreement on additional exclusion criteria, PGGM will endeavour at the request of individual clients to establish segregated mandates to which additional criteria are applied. Clients can opt to apply these exclusion criteria additionally to external mandates or funds in which investment takes place directly.

Dilemma: passive investing in listed equities

In our pursuit of excellent service provision, we want to keep our costs as low as possible. One of the ways we do this is by investing some of our clients’ assets passively in listed equities. Passive investing involves relatively low costs and the broad spread has advantages, such as reduced risk. But it also has the consequence that we are invested in an extremely high number of companies. As a result we are also invested in companies that are criticised by society. Stakeholders such as NGOs or the media call us to account for these investments. This criticism is understandable and useful. It shows that society is concerned about the topics we feel are important too. We are open to discussion and often notice that we do not have a substantive difference of opinion, even though we may choose a different route than the one being called for. Our strategy as investor to encourage movement towards impact investing and, on the other hand, reduce the things we do not want in the benchmark underscores this.

Dilemma: pulling out of fossil fuels

PGGM and our clients are increasingly criticised for our investments in companies in the fossil fuel industry. Fossielvrij published a report entitled ‘Voor alles niet schaden’ [First do no harm], for instance, charting out our largest client’s investments in coal, oil and gas, with the exhortation that these investments be sold. We share the concerns of Fossielvrij and others. Together with our clients, we are trying to contribute to the same objective, a low-fossil-fuel society. But we have different opinions on how this objective can be reached. Simply selling our fossil fuel investments will not automatically result in lower global emissions. The companies will not disappear, but will go to a different owner, who may indeed still see a future in fossil fuels.

Getting our hands dirty for a cleaner world

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We believe that investing in companies that can offer an alternative to fossil fuels has more impact. We are therefore expanding such investments via our investments in a solutions portfolio. At the same time, we encourage existing companies to become more sustainable. We do this through active shareholder dialogue (engagement) and by shifting investments in the energy, utilities and materials sectors from CO2-intensive to CO2-efficient companies. We sometimes get our hands dirty doing this, but it is necessary in order to contribute to a cleaner world.

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