Dutch giant PFZW revamps responsible investment policy in year-long exercise

Revision follows the signing of government-backed ESG covenant

PFZW, the €206.5bn Dutch healthcare sector pension scheme, says it is developing a new policy for responsible investment – including an ESG screening methodology – targeted for completion by 2020.

Speaking to RI, a fund spokesperson said PFZW’s investment universe for equities will remain unchanged in 2019 – with all exclusion decisions to be put on hold – until the new responsible investment policy is finalised.

The revised policy will be valid for five years until 2025, when it will again be up for review.

The new policy will incorporate elements of a government-backed responsible investment covenant which was signed by 73 Dutch pension funds, representing €1.2trn of assets, in December.

The covenant is underpinned by the OECD’s Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights; it followed a year-long negotiation between the country’s pension sector, government, trade unions and civil society.

PFZW’s ratification of the covenant has already resulted in policy changes.As part of a “shift from avoiding negative side-effects of investments to desired impact”, or a renewed focus on positive impact, the fund will no longer disclose all of its exclusions.

Instead, only product groups which have been divested entirely will be listed. As of now, this comprises controversial weapons, tobacco and countries sanctioned by the UN or EU (e.g. Myanmar, Iran, Somalia, South Sudan).

Previously, PFZW disclosed all exclusions including those resulting from failed engagements.

There has already been some confusion in the first week of the policy’s implementation after numerous news outlets reported that five Israeli banks – excluded since 2014 over financing activities in the occupied West Bank – were now eligible for investment.

Dutch paper Reformatorisch Dagblad, among others, was forced to print corrections after PFZW clarified that its policy on the five banks remained unchanged.

The fund will continue to disclose its holdings in a “transparency list” which is updated in April every year.