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Stichting Pensioenfonds Zorg en Welzijn

PRI reporting framework 2020

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Pre-Investment (Selection)

INF 05. Incorporating ESG issues when selecting investments

05.1. Indicate if your organisation typically incorporates ESG issues when selecting infrastructure investments.

05.2. Describe your organisation`s approach to incorporating ESG issues in infrastructure investment selection.

On our behalf the PGGM Infrastructure Team invests directly in infrastructure companies and projects.

The initial step here is the ESG Quickscan: Prior to making investment PGGM assesses the potential ESG risks. The ESG Quickscan is an integral part of the Investment Proposal which forms the basis for the investment decision in the Investment Committee. For example, PGGM considers the potential for conflict within the region, the working standards and working conditions within the region, and the relationship with trade unions. Next, during the due diligence phase, PGGM manages the identified risks. Depending on the outcome, PGGM formulates initiatives, which are aimed at the improvement ESG profile, managing these risks and on reporting potential incidents. All new investments are urged to participate in the GRESB Infrastructure[1] asset assessment, the online ESG benchmark platform, and report on the ESG KPIs as part of the reporting requirements. The ESG factors furthermore are a fixed part of the monitoring discussions and management is asked to devote attention to these factors, particularly if performance is lagging.

Due to our long-term investment horizon, improving the sustainability of business operations of our investments is essential and in line with our interests and our participants. Through our direct interest, we are often able influence corporate governance related policies and organisation structure. Future trends, such as climate change and technological developments focused on limiting climate change, are an important part of the long-term business plans we discuss with management. The PGGM Infrastructure team makes the portfolio more sustainable and consequently more future-proof through direct investments in solutions for climate change and water scarcity and by making the existing broader infrastructure portfolio more sustainable.

We focus on ESG improvements within the existing infrastructure portfolio. This includes safety in the operation, construction and maintenance activities, reducing energy use and implementing CO2 reducing solutions, such as LED lighting, the use of residual heat and heat pumps. We specifically focus on projects that reduce CO2 emissions and initiatives that limit industrial accidents and the absence of personnel. [FI1]

We also measure the ESG-related performance of our investments through means of the GRESB Infrastructure. In 2019, we added 5 new investments to the GRESB Infrastructure benchmark. PGGM Infrastructure Fund scored overall 57 (2018: 47), which was above the GRESB average of 55. The fund score was 83 (2019: 63), 12 points above GRESB average and weighted average asset score was 46 (2018: 40), 2 points below GRESB average.

Our portfolio company GlobalVia achieved with 93 (2018: 90) the highest score in GRESB globally and are also leader in their sector compared to peers.

For 2020 PGGM has designed a program aiming to continue improving our relative position in the benchmark, which includes workshops with experts from the Responsible Investment and exchanging best practices between portfolio companies. Moreover we are focusing more on the non-financial reporting at our portfolio companies.

In 2019, the Infrastructure Team also focused on investments in wind and solar energy, efficient heating solutions and water (treatment).


INF 06. ESG advice and research when selecting investments (Private)

INF 07. Examples of ESG issues in investment selection process

07.1. Indicate which E, S and/or G issues are typically considered by your organisation in the investment selection process and list up to three typical examples per issue.

ESG issues

List up to three typical examples of environmental issues

          Climate change risk
          Compliance with environmental regulation
          Carbon footprint ﹠ stranded asset risk

List up to three typical examples of social issues

          Stakeholder engagement
          Health and safety at the workplace
          Employee satisfaction

List up to three typical examples of governance issues

          Board and management team effectiveness review
          Risk management

07.2. Additional information. [Optional]

INF 08. Types of ESG information considered in investment selection (Private)

INF 09. ESG issues impact in selection process (Private)