PGGM to double innovative responsible equity portfolio to €2bn

Dutch pension management giant PGGM, which runs €80bn in assets for the health care pension fund Pensioenfonds Zorg en Welzijn, is to extend one of the world’s biggest sustainability-driven investment strategies by doubling its responsible equity portfolio to €2bn this year. Responsible-investor.com can reveal that PGGM’s eight-strong Responsible Equity Strategies (RES) unit, which was launched in 2008 and includes investing in microfinance, will build out its existing €1bn portfolio in the coming months. A spokeswoman for PGGM declined to say what kind of assets the pension manager will be looking to buy. However, the terms of the new mandate have been set at doubling the portfolio to €2bn on the basis of new investments. The fund is also hiring a new responsible equity portfolio analyst, to be based in Utrecht. PGGM said the role would consist of screening and analysis of potential investments, due diligence and contact with investment banks and industry experts. PGGM’s strategy in targeting specialist ESG investments is to seek out innovative, externally-run investments where sustainability is a clear potential driving factor of returns.Examples of its existing targeted ESG investments include a €250m commitment to the Climate Change Capital Carbon Fund and €242m to GMO’s Long Horizons Forestry Fund. The manager has also invested €16m in the development of biogas plants in Germany and solar energy in Italy. A further allocation to Albright Capital Management aims to target emerging market investments based substantially on ESG factors and actively seeks to improve companies’ behaviour and local regulations. RES is also responsible for PGGM’s €200m microfinance investment programme. In 2008, PGGM entered into a transaction with Spain’s Banco Santander in 2008 investing in loans related to the financing of alternative energy, such as wind farms.
PGGM was one of the lead signatories to the United Nations Principles for Responsible Investment in 2006.
Last month the scheme teamed up with Dutch pension fund management peer, APG, and the Universities Superannuation Scheme in the UK to set up a global benchmark of the greenest listed property management companies.