Arnold: "Hands down our biggest step is that we have opted for our own equity mandate, which we have put together with Achmea Investment Management (AIM). Since the start in 2013, SNPS had only invested in investment funds and indices, so with mostly indirect and passive investments. But now we are making our own choices for about 30 percent, which is about 90 million euros of the invested equity in our Life Cycle portfolio Rendement and both our CVP portfolios. This will help us to better manage investments in companies that meet our ESG criteria."

Marijke: "In this equity mandate we focus on the G of governance. This translates into a preference for companies with a higher quality of management and a documented commitment to corporate social responsibility. And with a view to the E of environment: with this mandate, we also strive for investments contributing to the reduction of CO2 emissions; our goal is to surpass the benchmark on this criterion by 15 percent."  

Arnold: "This mandate is definitely our biggest ESG undertaking in the short history of SNPS. Another thing we have started investing in on a small scale in 2021 is Dutch mortgages. With this we can contribute to sustainable cities and communities, just think of mortgages that save energy or promote the installation of solar panels."

Arnold: "The social pressure to adopt socially responsible investment practices only increased further in 2021. Think of the lawsuits you see against energy companies, and the actions of NGOs such as Friends of the Earth Netherlands, which are getting a lot of media attention. As a pension investor, you can no longer avoid this topic."

Marijke: ““On top of that, legislation has clearly become tighter and more stringent. ESG investing is increasingly becoming rule-based rather than principle-based [1].”

[1] Rule-based gaat uit van zoveel mogelijk regels om het gedrag te beïnvloeden en principle-based gaat juist uit van weinig regels en vooral focus op de relevante principes.

Arnold: "We are already working with the engagement policy of EOS at Federated Hermes (EOS). This is an engagement services provider that acts on behalf of a large group of investors, including us, and therefore has much more clout than any individual pension fund would have. EOS has well over thirty engagement specialists who pursue a dialogue with companies. Their approach, ways of communicating and views perfectly match with our own.  Moreover, as an extension of their dialogues, they provide voting advice and proposals for shareholders' meetings. Through them, we can make our voice heard. This is key, because we aim to be a shareholder who is very involved in the extent to which the companies we invest in are 'ESG-proof'."

Marijke: "In the survey we did in 2020, our participants indicated which four Sustainable Development Goals (SDGs) they considered the most important, with 'Affordable and Clean energy' taking first place. These have been included by EOS in their engagement plan." 

Arnold: "The further you explore this issue, the more complex your discussions are bound to become. Just consider natural gas. To what extent is that green or not? Obviously gas is not free of CO2 emissions, but it is better than coal. And how green is nuclear energy?"

Marijke: "What we always try to remember during these discussions is our ultimate goal: to offer our members a good pension in the long run, in the most sustainable way possible. And to communicate clearly about this."  

Arnold: "It's not only about money and returns, but also about the world in which you may be receiving that pension now or at a later date. We first and foremost want to better manage our investment risks with a view to ESG factors."   

Arnold: "That is the very classical and justified question, and it calls for careful consideration. Every assessment involves the combination of ESG factors, return and risk. Socially responsible investment is what we are aiming for, but it should not be at the expense of long-term returns or cause too high a risk or additional costs. That is a very complex issue. And can indeed be food for a healthy debate."

Marijke: "In addition to that, I think it's a positive development that this topic is increasingly being discussed within our board. By 2021, all board members will have completed an extensive ESG training course."

Marijke: "On 1 January this year, the EU has introduced a new ESG taxonomy. This taxonomy can be seen as a kind of glossary, with which you can clarify how green an investment or economic activity truly is. You will then have all kinds of calculation rules, however those are not available yet. The purpose of this taxonomy is to improve the consistency and transparency of the classification of individual investments. And for us it means that following this taxonomy we have to report on what percentage of our investments meet the European definition of sustainable."

Arnold: "We want to put together our own distinctive profile, explaining what we as SNPS are all about with our ESG investments. Think of it as a further development. In combination with the results of the ALM study we are going to carry out for SNPS in 2022, this will provide a solid foundation. In the years ahead, we intend to focus more on the ESG results of our investments, so on inclusions rather than exclusions, when companies are doing well, best-in-class in a sector, and so on. This way you can contribute to the energy transition or better social conditions, just to name a few."       

Marijke: "Obviously we also intend to intensify our communication about ESG. A good step in that direction is the ESG meter of Achmea Investment Management, which informs us about the ESG ratings of our investments. This way we get more and more insight into our investments."