Nestlé Pensionskasse (NPK), the €1.02bn German pension fund for the food giant of the same name, has hired German ESG research firm Oekom to evaluate its portfolio with respect to sustainability in the first sign that the theme is gaining ground in the country’s corporate pensions industry.
NPK said it would rely on Oekom’s sustainable ratings of companies and countries. “Thanks to the detailed analyses compiled by Oekom, we will be able to better ascertain the risks associated with the social and environmental performance of companies and countries,” said Peter Hadasch, the former head of NPK who was recently promoted to Nestlé’s human resources executive for Germany. Hadasch’s successor at the fund is Bettina Nürk, a pensions expert who worked at JP Morgan and a local investment consultancy called Alpha Portfolio Advisors.
With an allocation equalling 28.2% of assets, NPK is one of the few big equity investors within the German corporate pensions industry. The scheme’s remaining allocation includes 56.5% bonds and 15.3% real estate, including direct holdings and funds. NPK earned 3.7% in 2012, down from 4.9% in 2011 and as much as 9.7% in 2010.The arrangement is a milestone, as sustainable investing is rare in German corporate pensions. Although the MetallRente, a €3bn scheme for Germany’s engineering industry, has signed up to the Principles for Responsible Investment (PRI), MetallRente itself is not a corporate fund, but a sales platform created by a consortium of insurers, including Allianz, Generali and Swiss Life.
It means NPK has become one of the first German corporate pension funds to publically embrace sustainable investing. There has been some sustainable activity by other schemes like the €1.6bn pension fund for German technology fund Bosch, but this has been limited to renewable investing.
Hadasch himself backs sustainable investing and, until his promotion, served on a seven-member ESG advisory panel for DWS, the retail fund arm of Deutsche Bank. The NPK has yet to sign up to the PRI, however. Other members of DWS’s ESG panel include Christian Strenger, the former DWS managing director who has become one of Germany’s most visible advocates of good corporate governance.