Dutch investor giant APG has used data collected through its Sustainable Development Goals (SDGs) partnership with other asset owners to underpin new responsible investment benchmarks.
APG Asset Management has created five iSTOXX APG World Responsible Investment indices in partnership with BlackRock and index provider Qontigo.
A pooled fund tracking the iSTOXX APG World Responsible Low-Carbon SDI Index has already secured a €1bn commitment from two of APG’s clients. RI understands one of these clients is BpfBouw, the Dutch pension fund for the construction sector, and that it has committed around €900m to the strategy. The other unidentified client is expected to commit around €300m, RI understands.
Both clients plan to double their SDG investments by 2025.
The benchmarks use APG’s data sets, including one from the Sustainable Development Investments Asset Owner Platform (SDI AOP) – a Dutch initiative founded by APG and fellow pension investor PGGM in 2019 and backed by British Columbia Investment Management Corporation and Australian Super.
SDI AOP is a stand alone entity that seeks to standardise sustainable development investments and map investment portfolios to the SDGs. It uses an in-house ‘taxonomy’ to identify solutions to support the SDGs, and Dutch technology and data firm Entis uses AI to contribute “Sustainable Development Investments classifications” for 8,000 firms to the platform. Qontigo has exclusive distribution rights for the data.
Today’s product launch marks the first time data from the SDI AOP is used to build investable indices, said APG.
“Our aim is to contribute to a global standard for investing in SDGs, and these new responsible SDI indices reflect this goal,” said Ronald van Dijk, Managing Director at APG Asset Management.
The starting universe for all five indices is the iSTOXX World-A Index, a global developed markets index, and the respective indices will incrementally “layer in” specific ESG filters, such as exclusions, carbon, ESG leaders and SDI.
In other fund news, Federated Hermes launched today a Climate Change High Yield Credit fund seeded by Swedish pension fund AP1. It will use a proprietary framework to reflect the holdings’ progress towards decarbonisation. The fund will not hold companies “where engagement on climate change transition has failed and will exclude controversial sectors and heavy greenhouse gas-emitting issuers that have no desire to change”.
BpfBouw had not responded to a request for comment at the time of publication.