PGGM is our fiduciary manager. The answers in this module are a reflection of their Manager Selection, Appointment and Monitoring.  We closely monitor how PGGM implements our RI policies and integrates ESG in the investment processes and decisions. This is discussed regularly at different levels, e.g. at board level, in investment committee and executive office as well as in a number of working groups addressing specific RI related topics.

The External Management department of PGGM Investments - on our behalf - selects, monitors and manages external managers for the funds and segregated mandates. PGGM Investments recognizes the important role External Management has with regard to responsible investment, which is to ensure that external managers apply our policies and guidelines. External Management aims to select external managers who share our beliefs and pay due attention to material ESG risks and opportunities in the their investment decision making processes. One of the indicators hereof is when the external manager is a signatory to the UNPRI and/or other relevant organizations. However, being a signatory is often nog enough. We will seek further understanding of the actual activities of the manager in integrating ESG in their investment process. This is included in our selection and monitoring of external managers. We expect that the external managers live up to the spirit of our responsible investment beliefs in both their investment processes and in the way that they organize their business. External Management uses the PGGM Selection and Monitoring Framework (SMF) to assess the quality of potential external managers and for ongoing monitoring of current external managers. This framework consists of seven categories: Philosophy, People, Process, Performance, Planet (ESG), Platform/Organization, Price/Costs. The category 'Planet' is the basis to determine in both the selection and monitoring the extent to which the external manager has integrated responsible investing in its investment process and to which extent it is incorporated in its day to day operations. This is based on the PRI Guidelines for Manager Selection.

 External Management will continuously monitor the progress of the responsible investment activities of our external managers. Besides that we will compare their activities to what is considered best practice in the market regarding responsible investment in asset management. This also enables PGGM to create its own benchmark against which the managers' responsible investment activities can be scored. Any possible improvements will also be input for future discussions. The responsible investment criteria are used as a formal component of overall manager performance evaluation. PGGM determines in the contract with the manager how ESG factors will be discussed, which assessment criteria apply to them, what reporting requirements and KPIs are laid down and how the ESG performance. For our yearly reviews of external managers, we ask them how they integrate ESG and any progress made and score them on ESG. The Risk committee oversees the ESG scores and monitors them. Our External Manager Report contains a separate section on ESG. See https://www.pggm.nl/english/what-we-do/Documents/responsible-investment-in-external-management_january_2017.pdf for more information