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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 - Fixed Income » ESG incorporation in actively managed fixed income » Implementation processes

Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
SSA
0 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
100 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
0 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
100 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
100 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
0 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
100 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

On our behalf our asset manager pggm follow's a 3 pillar ESG strategy within fixed income: exclusion, engagement and thematic investing.

They exclude companies and bonds according to our policÿ: government bonds from countries on the EU and UN sanctions list and companies related to controversial weapons and tobacco, and companies where engagement fails on human rights, environment and corporate governance.

PGGM  integrates ESG analysis in our fundamental credit analysis.ESG aware issuers are better future-proof and provide a better risk-return investment than a comparable issuer with worse ESG credentials. We engage with management of companies and (sovereign) debt issuers through meetings and calls on ESG topics.

PGGM invest actively in bonds which specifically target solutions in the areas of Climate Change, Water scarcity, Food security and Healthcare (our target = 20 billion). These can be green- or social bonds but also pure play bonds. Green bonds also act as a 'talking stick' to discuss the ESG policy of an issuer of such bonds, since we don't believe a green bonds can be issued when it is not in line with the general ESG policy of the issuer. For our fixed income portfolios these bonds comprise approximately 5-10% of the assets.

01.3. Additional information [Optional].

On our behalf, PGGM incorporates a thorough analysis of various ESG criteria in the credit analysis of each company that we cover. Since we consider the impact of ESG factors on the credit profile as material, if significant risks are identified, this has a strong impact in the overall credit score of the company. In that sense we feel that integration of ESG factors in the overall credit analysis makes a lot of sense. Since ESG risks differ materially between sectors, PGGM also looks at specific themes to identify the risks that companies have in that respect. These range from stranded assets to the electrification of carmakers or the exposure to litigation in the banking sector. These thematic researches can then lead to adjustments in the investment portfolio.

Regarding Securitised investments: The PGGM Implementation Guidelines on Exclusion are applied when investing in Credit Risk Sharing transactions. CRS investments reflect synthetically structured first and/or second loss tranches on bank loan portfolios. PGGM does not manage the underlying loan portfolios and is unaware of the individual company names as confidential internal bank data is shared with the investor. PGGM determines the general criteria for exposures allowed into the portfolios. The relevant bank (verified by a third party) will exclude the names and countries which are listed on the PGGM's ESG-based Exclusion List. The corporates to be excluded are determined by the PGGM Responsible Investments team, which engages with companies on ESG-related topics. The country and company exclusions are mainly based on the sanction lists of the United States, the UN Security Council and the European Union. This list is focused on publicly listed companies. As the CRS mandate will often share in credit exposures not available in public markets, PGGM also applies the exclusion list in the spirit of what the list sets out to do. In practice this means we exclude the industry sectors Tobacco and Defence as a whole instead of only excluding certain listed names. With regards to specialised lending like project finance, the exclusion list is applied on a 'look-through basis'. As the borrower in these cases is a legal entity specifically established for that project, the list is applied to the main sponsor(s) to that specific project rather than the borrower itself.

FI 02. ESG issues and issuer research (Private)

FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]

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