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Stichting Pensioenfonds Zorg en Welzijn

PRI reporting framework 2020

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - HF 01]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Indirect – Manager Selection, Appointment and Monitoring
Listed Equity and Fixed Income Strategies [SAM 01] Selection [SAM 02 - 03] Appointment [SAM 04] Monitoring [SAM 05 - 07] Outputs and outcomes [SAM 08 - 09]
Direct - Listed Equity Incorporation
ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (A) Implementation: Screening [LEI 04 - 06] (B) Implementation: Thematic [LEI 07] (C) Implementation: Integration of ESG factors [LEI 08 - 10] Outputs and outcomes [LEI 12 - 13]
Direct - Listed Equity Active Ownership
Overview [LEA 01] Engagement [LEA 02 - 08] Outputs and outcomes [LEA 09 - 11] (Proxy) voting and shareholder resolutions [LEA 12 - 21]
Direct - Fixed Income
ESG incorporation in actively managed fixed income [FI 01 - 12] Implementation processes [FI 01 - 03] (A) Implementation: Screening [FI 04 - 06] (B) Implementation: Thematic [FI 07 - 09] (C) Implementation: Integration [FI 10 - 12] ESG incorporation in passively managed fixed income [FI 13] Fixed income - Engagement [FI 14 - 16] Outputs and outcomes [FI 17 - 18]
Direct - Property
Overview [PR 01] Pre-investment (selection) [PR 04 - 06] Post-investment (monitoring and active ownership) [PR 08 - 14] Overview [PR 08] Property monitoring and management [PR 09 - 10] Outputs and outcomes [PR 15 - 16]
Direct - Infrastructure
Overview [INF 01 - 02] Pre-Investment (Selection) [INF 05 - 09] Post-investment (monitoring and active ownership) [INF 11 - 16] Overview [INF 11] Infrastructure Monitoring and Operations [INF 12 - 14] Infrastructure Maintenance [INF 15] Stakeholder engagement [INF 16] Outputs and outcomes [INF 17 - 18]
Confidence building measures
Confidence building measures [CM1 01 - 07]
Export Public Responses
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You are in Direct - Property » Pre-investment (selection)

Pre-investment (selection)

PR 04. Incorporating ESG issues when selecting investments

04.1. Indicate if your organisation typically incorporates ESG issues when selecting property investments.

04.2. Provide a description of your organisation`s approach to incorporating ESG issues in property investment selection.

Responsible investment is an integrated part of the day-to-day tasks and responsibilities of the LRE team. These responsibilities basically comprise of (1) active equity ownership activities and (2) the integration of ESG in the investment process. As for the active equity ownership, the LRE team has the responsibility to address any particular ESG related issue when meeting senior management teams or other representatives of listed real estate companies, to selectively draft, discuss and monitor “road maps” to aim for improvement when companies are consistently underperforming on particular ESG-matters, and  to vote proxy proposals in line with fiduciary duties. When considering the integration of ESG in our investment process, the team has the responsibility to identify potential ESG red flags when defining its research coverage as well as to extensively review and score the ESG practices of a particular listed real estate companies, to ultimately translate these scoring in the future return potential of any particular company (in the qualitative and quantitative modeling framework). The LRE team has a strong believe that ESG should be taken into account when considering risk and return for a specific company, this is ultimately done by integrating all information into the key processes of the team.

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

Environmental example 1, select one

Environmental example 1, description 

          Given the contribution of real estate to the emission of greenhouse gases and the use of natural resources, increasing the sustainability of existing real estate is especially important. This means that return (adjusted for risk) and sustainability will go hand in hand over time. An example of this is the investment in Deutsche Wohnen [German Living] (approx. € 320 million). This company owns approximately 160,000 homes and care apartments and systematically renovates these – often ageing – apartments to bring them up to a more sustainable level. We measure progress in terms of the sustainability of the portfolio on the basis of the GRESB figures, among others. GRESB collects information about sustainability on the basis of an annual survey, which indicates the extent to which companies have a sustainability policy and whether they in fact implement this policy. The GRESB figures show that the listed real estate equities score better than the average results and that the portfolio managed by PGGM in turn structurally scores better than the average of the listed companies tracked by GRESB.
We continuously invest a lot of time to gain insight into the risks and impact of climate change on our portfolio.

Environmental example 2, select one

Environmental example 2, description

Environmental example 3, select one

Environmental example 3, description

Social example 1, select one

Social example 1, description [OPTIONAL] 

          PGGM’s role as a capital provider is also important in the build-up and management of care real estate portfolios. PGGM’s listed real estate portfolio includes care real estate investments. The bulk of these investments is currently located in the United States. For example through investments in Alexandria Real Estate, we currently have investments in life science assets across the United States.

Social example 2, select one

Social example 2, description [OPTIONAL]

Social example 3, select one

Social example 3, description [OPTIONAL]

Governance example 1, select one

Governance example 1, description 

          On our behalf, PGGM maintains intensive contact with the management of each company in the portfolio and engages them in a dialogue on the possibility of implementing governance improvements. This dialogue is also increasingly conducted with the supervisory board, especially concerning the subject of remuneration and diversity. We also discuss crucial areas of governance with other investors in order to develop market standards. We use various means for this purpose, including the Investment Advisory Committee for Listed Real Estate that
we created last year and which is chaired by us. This enables us as a sector to clearly identify the governance improvements we consider important, although every investor individually will have to disseminate this to the companies in the portfolio.

Governance example 2, select one

Governance example 2, description

Governance example 3, select one

Governance example 3, description

04.4. Additional information. [Optional]

PR 05. Types of ESG information considered in investment selection (Private)

PR 06. ESG issues impact in selection process

06.1. Indicate if ESG issues impacted your property investment selection process during the reporting year.

06.2. Indicate how ESG issues impacted your property investment deal structuring processes during the reporting year.

06.3. Additional information.

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