PME, the Dutch pension fund for the metal and electrical engineering industry, has announced it will invest 10% of its portfolio in line with the aims of the United Nations Sustainable Development Goals and reduce the carbon emissions of its €17bn equities portfolio by 25%.
It comes as Dutch pension funds have already collectively committed to SDG investing. Late last year, 18 Dutch financial institutions, managing over €2.8trn in assets, presented a report to their government and central bank outlining an action plan for investing along the themes from the Sustainable Development Goals.
The latest commitment from PME, which manages €45bn in assets, was revealed this week at the Impact Summit Europe in The Hague.
Over the next five years, PME will invest 10% of its investment portfolio in line with the SDGs across various investment classes. Sustainable investments to which PME is expected to contribute include affordable and sustainable energy, work and economic growth, sustainable innovation and sustainable cities.
PME and its asset manager MN are currently investigating the requirements that investments will have to meet to contribute to sustainable developments as defined by the UN.
“Setting specific goals is a major step forward in our socially responsible investment policy,” says PME asset management executive director Marcel Andringa.
“We are pioneers in this respect within the world of institutional investors. Our main task is to ensure a satisfactory and affordable pension. Furthermore, we wish to contribute to a sustainable world when it comes to climate, living & working conditions, energy and the use of fossil fuels. Investing on this basis is in line with the wishes of our participants. We have discussed this subject with them in detail.”Talking to RI at the event, Karlijn van Lierop, director Responsible Investment and Governance at MN, said that the target on investing in SDGs was the result of PME’s review of its responsible investment policy. As well as its commitment to SDG investing, PME has a target to reduce the carbon emissions of its equities portfolio by 25% by the end of 2021.
“We wish to contribute to a sustainable world”
Van Lierop says the development of PME’s new RI policy was done in close collaboration with beneficiaries. Discussing this at the Impact Summit Europe in a panel on making the case for impact investing, she said it included explaining to pension scheme members about what impact investing is and how their investments could contribute to solutions for society and deliver market rate returns.
“The issues they cared about were climate change and energy transition, and investing in solutions such as renewables.”
Van Lierop explained PME’s beneficiaries are very aware of the challenges of climate change because they worked in energy intensive-industries themselves.
Other themes important to pension scheme members was waste reduction, access to finance and affordable housing. “We will now go out into the market and find suitable solutions that fit our mandates,” says Van Lierop.
On PME’s SDG investing initiative Van Lierop said MN was currently undertaking an exercise to see what it currently contributes to the SDGs. Then it will move towards developing PME’s allocation of 10% to the SDGs.