APG together with PGGM have developed a methodology to identify investment opportunities linked to 13 of the United Nations’ 17 Sustainable Development Goals (SDGs). They refer to this methodology as so called taxonomies. More information about it in the IPE interview with Claudia Kruse and Els Knoope of APG.
Taxonomies are the results of the research. These are demonstrated areas APG and PGGM consider being potential sustainable development investments (SDIs), bridging the gap between the UN’s targets and tangible investment opportunities.
Claudia Kruse, managing director responsible investment and governance at APG, told IPE the “taxonomies” were designed to provide “clear guidance on what type of investments qualify as SDIs”. “The taxonomy is by no means perfect yet,” she said. “A lot of work and thought has gone into it but what we are really hoping is that it is the start of an in-depth conversation between asset owners on how we can take this further as we gain more and more experience implementing this in our portfolio.” The intention was to “kickstart the conversation about a market standard for SDIs”, said Kruse.
APG and PGGM have shared the taxonomies and supporting guiding materials with several other institutions. Sweden’s four main buffer funds and Australia’s Construction and Building Unions Superannuation fund are said to have explicitly expressed their support. Kruse said APG and PGGM believed the guidance was the first to come from asset owners that are private market entities.
Els Knoope, senior responsible investment and governance specialist at APG, said the intention was to share the work with external managers to encourage the development of investment opportunities meeting APG’s and PGGM’s standards. “We already see some proliferation of products being developed at the moment that maybe are not as close to what we intend, so we really hope that sharing this work and further developing it will help,” Knoope said.