Our impact
Invested in Solutions
€ 20.8 billion
Total assets in SDGs
16%
CO2 emissions avoided
10.5 million tonnes
Generating value for stakeholders and society
We work for pension funds and invest with a long time horizon. We therefore consider how our world should look in the future and what effect our investments have on this world. After all, it is in that world that the participants of our clients will receive their pensions. We therefore contribute to a liveable and sustainable world and in doing so add value for our clients and their participants.
The value we have created
We use our clients’ money for a sustainable and liveable world. In 2014, our biggest client PFZW issued the mandate to realise investments of €20 billion in 2020 in solutions for four social issues: climate change, water shortages, food security and health care. These targeted investments, which we call Investments in Solutions (BiO), not only contribute financially to the returns for our clients, but also create social added value.
We invest in solutions via a specific listed shares mandate that we call Investment in Solutions via Liquid Shares (BOA). We also invest in solutions via other asset classes, such as real estate and infrastructure.
At the end of 2020, €20.8 billion was invested in solutions for these topics. Read more about this result here
Assignment: at least €20 billion invested in solutions in 2020
| Focus area | € invested (billion) | € New in 2020 (billion) |
|---|---|---|
| Climate and environment | € 10,2 | € 1,3 |
| Water | € 1,9 | € 0 |
| Food | € 3,6 | € 0,5 |
| Health | € 5,0 | € 0,8 |
| Other | € 0,1 |
How our clients’ investments contribute to the SDGs
The themes in which we have been investing in solutions for clients since 2014 are reflected in the Sustainable Development Goals (SDGs) created by the United Nations (UN) in 2018. The UN has identified 17 goals that advise governments, businesses and citizens about a more sustainable and liveable world. Based on our experience with these investment themes, we bundled our forces with APG to develop a framework for the identification of products and services that contribute towards the UN SDGs. We call these Sustainable Development Investments (SDIs).
Standardisation: Sustainable Development Investments
The Sustainable Development Investments Asset Owner Platform (SDI) was officially started in 2020, with, alongside initiators APG and PGGM Investments, now also the British Columbia Investment Management Corporation (BCI) and Australian Super. This Platform is aimed at developing a standard for the classification of investments as SDI, using artificial intelligence. The EU taxonomy serves as important input for this.
Invested assets in Sustainable Development Goals by PGGM per 31/12/20
| Investment category | Total value investment category (in mln) | SDI value (in mln) | % SDI per investment category |
|---|---|---|---|
| Corporate credits | € 15.351 | € 1.527 | 10% |
| Credit risk sharing transactions | € 5.114 | € 180 | 4% |
| Equities | € 84.292 | € 16.842 | 20% |
| Infrastructure | € 10.637 | € 3.115 | 29% |
| Insurance linked investments | € 6.144 | € 6.073 | 99% |
| Listed real estate | € 14.859 | € 4.849 | 33% |
| Microfinance | € 2 | € 2 | 100% |
| Other | € 5.625 | € 27 | 0% |
| Private Equity | € 15.188 | € 1.138 | 7% |
| Private real estate | € 15.062 | € 7.541 | 50% |
| Real assets | € 546 | € 457 | 84% |
| Sovereign bonds & SSA | € 93.827 | € 2.173 | 2% |
| Treasury (and overlays) | € 1.647 | € 113 | 7% |
| Total | € 268.293 | € 44.036 | 16% |
Invested assets in Sustainable Development Goals by PGGM
Investing with impact:
Commitment to Blackstone Life Sciences Fund V
PGGM Investments aims to invest more into solutions that contribute to the Sustainable Development Goals (SDGs)
Investing with impact:
EU SURE bonds
PGGM Investments has invested € 212 million euros for PFZW in new bonds issued by the European Union (EU).
Calculating our impact
The focus in responsible investment is increasingly shifting from financial performance to results that provide an insight into the social impact of the investments.
Part of the classification of an Investment in Solutions (BiO) is the annual measurement of the societal impact and the reporting on this. This concerns data such as megawatts of sustainable energy generated, number of people with access to affordable health care, number of litres of treated water, etc. As a result, we now have five years of experience with measuring the societal impact of our BiO. In addition to the financial returns, we calculate the impact of these investments and state how the BIOs have contributed towards the selected themes.
An Impact-driven Portfolio
The SDGs are proving to provide a clear global blueprint that stipulates long-term business opportunities in sustainable development. For many of the SDGs and their targets, however, investors are struggling to shift from reporting on inputs to actual impacts – what does the investment actually achieve with regards to the SDGs?
Looking ahead: from Investments in Solutions to Sustainable Development Investments
In the 2025 Investment Policy, the board of PFZW formulated two objectives for investing with impact. The first objective is that 20% of the invested assets in 2025 should consist of SDIs. The second objective is to double the measured impact on seven focus SDGs. The core is still the BiO themes: food (SDG2), health (SDG3), water (SDG6), climate and pollution (SDG7 and 12). Two SDGs have been added to these in the 2025 Investment Policy: SDG11 (sustainable real estate) and SDG 13 (climate action).
Only by measuring the impact of the investments can it be convincingly stated whether the investment makes a positive contribution to the world. There will be more emphasis on actual improvements for people and the environment. In order to prevent greenwashing, the aim here is to achieve standardization. The SDI Asset Owner Platform will expand to include asset owners. In terms of content, the most important directions are: potential impact, outcome (impact) metrics and further harmonization with the EU taxonomy.
With BiO and now SDI we have focused exclusively on positive impact. In 2021, more (transparency) requirements will be set regarding negative impact and ESG risks. This will counteract selective evidence (greenwashing). We expect that specific conditions for positive impact (“do no significant harm”) will be drawn up.
Correspondence address
PGGM
P.O. Box 117
3700 AC Zeist
Visiting address
PGGM
Noordweg Noord 150
3704 JG Zeist
Disclaimer
The original PGGM Investments annual report 2020 and its financial and non-financial statements were drafted in Dutch. This website is an English translation of the original Dutch document. In case of any discrepancies between the English and the Dutch text, the latter will prevail.
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