In 2018, APG has made significant progress in realizing our pension fund clients’ stated ambitions in the areas of sustainability and responsible investment. This relates, among other things, to the growth of our investments in the UN Sustainable Development Goals, and the progress that has been made in assessing all companies APG can invest in via shares or bonds on the basis of both financial and sustainability factors.
These results were announced in the Responsible Investment Report 2018, published today.
Nearly € 70 billion in sustainable development investments
By the end of 2018, APG had invested € 69.2 billion (2017: € 55.3 billion) in companies that contribute to the UN Sustainable Development Goals (around 15% of assets under management). The two largest pension fund clients, ABP and bpfBOUW, have specific targets for these Sustainable Development Investments (SDIs) in 2020. APG, together with PGGM, has developed a framework for determining which companies with their products and services contribute to sustainable development.
Important progress in inclusion
In 2018, APG has also taken significant steps forward with the ‘inclusion policy’. This means that all 10,000 companies APG can invest in through shares or bonds are assessed in terms of risk, return, costs, and how responsibly they operate. By the end of the year, APG had assessed 7,700 companies (2017: 600) on the basis of these criteria. Our clients have indicated that, from 2020 onwards, they only want to invest in companies that meet all criteria, or that can reasonably be expected to improve as a result of investor engagement.
At the forefront of assessing climate impact
Also in 2018, APG received international recognition for its leading position in identifying climate risks and their possible impact on our investment portfolio. In research by the Asset Owners Disclosure Project (AODP), APG is the only asset manager in the world with the highest (AAA) rating when it comes to taking into account the effects of global warming on investments. In 2018, APG carried out additional analysis to determine how fast the global energy transition is progressing and what impact climate change may have on the portfolio, and hence on the pensions of our clients’ beneficiaries.
Carbon reduction and renewable energy
The carbon footprint of APG’s equity investments decreased by 28% in 2018 (against the reference year 2014). All our pension fund clients have the stated ambition to reduce carbon emissions in the equity portfolio by 25%. APG’s investments in renewable energy amount to about € 3.25 billion (11% of total investments in the energy sector). With more than 300 other major investors, APG cooperates in Climate Action 100+ to put pressure on 161 companies that are responsible for the most carbon emissions worldwide.
Why we want to invest responsibly
APG wants to enable the pension fund clients to provide their beneficiaries with a good pension in a livable world. By looking at more than just financial factors, APG believes it can make better long-term investment decisions and, at the same time, contribute to a sustainable future.