PDN ANNUAL REPORT 2019 CONTENTS

PDN's Sustainability Policy

In the Sustainability Report 2019, PDN explains its sustainability policy and accounts for the most significant results over the reporting year 2019.


For PDN, the sustainability policy is a way of contributing to sustainable development in the world without putting pressure on the portfolio’s risk and return profile. The full sustainability report is included in the annual report and can be found on PDN’s website.

Sustainability in investments is a major aspect of the investment philosophy and an integral component of PDN's investment principles. In consideration of the fund’s place in society, the definition and implementation of the investment policy must be based on more than purely financial aspects. Aspects relevant to the sustainable and humane advancement of society are also observed.

The sustainability policy is based on five pillars.

  • Exclusion

    We do not invest in activities in companies and countries that the United Nations, the European Union, or the Dutch government consider unacceptable or which run counter to the standards and values of the UN Global Compact's Ten Principles. Controversial weapons are also excluded from investment.

  • Impact Investments

    PDN uses Impact Investments to help guide us in achieving both attractive financial returns and social objectives. Our investment decisions are based on the UN's seventeen sustainable development goals.

  • Transparency

    The fund ensures total transparency in terms of pension capital investments. Our website features the names of all the companies the fund invests in.

  • ESG Integration

    Where possible, investments are managed and evaluated according to Environment, Social, and Governance (ESG) factors.

  • Engagement & Corporate Governance

    Companies are encouraged to effect positive developments in the field of social issues and sustainability. Broader engagement processes are also being initiated to appeal to entire sectors. PDN’s voting at Dutch listed companies is based on its voting policy. PDN casts votes at General and Extraordinary Shareholder Meetings of listed companies in the Netherlands.

 

What do our members think?

In October 2019, PDN conducted a risk appetite survey among its members, which also gauged members’ stance towards sustainability. The most important outcomes can be found below.

Of the members who took the survey:

  • a large majority considers it PDN's responsibility to take account of the impact on people and the environment when making investments.
  • a majority does not want this to be detrimental to PDN's returns or to increase risk.
  • more than a third do not know that PDN is engaged in SRI.
  • the consequences of SRI on returns and risks are unclear

PDN will evaluate the results of this survey in 2020, and will refine its policy and communication accordingly.

Sustainability in 2020

In 2019, PDN gained its first experiences with engagement, dedicating considerable time and effort to formulating policy on Sustainable Development Goals and implementing Carbon Footprint reductions.

De Nederlandsche Bank conducted a standard investment audit at PDN at the end of 2019. With regard to PDN’s sustainability policy, the DNB believes that the implementation framework for the sustainable investment policy is limited. The fund will take this into account in the continued development of its sustainability policy.

For 2020, PDN is investigating whether its current voting policy should be extended to include international equity investments and whether it should explicitly include matters of sustainability.

In addition, PDN will also work on implementing the IMVB covenant and EU sustainability initiatives, such as the EU Taxonomy and EU Green Bond Standard, in 2020.

Work to identify and manage sustainability risks in liquid and unlisted investments will also continue in 2020. PDN is also committed to cooperating with multiple parties to promote sustainability at all its interfaces.

PDN will continue to shape its vision on sustainability in 2020, being keenly conscious of both its role in society and its objectives with regard to achieving good pensions for its members. This is a tremendous responsibility, especially now that the funding level is considerably lower than required. In addition, it is important that members are able to enjoy their retirement in a liveable world, which is why PDN signed the United Nations Principles for Responsible Investment in January 2020. In doing so, PDN has committed itself to embedding sustainability even more firmly in its policy and the implementation thereof.