Global Sector Studies shaping PGGM's Sustainable Credit Investing

At PGGM, managing capital on behalf of PFZW’s participants means investing their savings responsibly, in profitable companies that contribute to a healthier, more sustainable world. This has become the new normal. Meeting that expectation across global credit markets and the ambition to share that knowledge more systematically across the organization, requires us to keep deepening our sector-by-sector expertise. 

That is why our Credit team is building out a programme of in-depth global sector studies: to create a common fact base on how sectors are structured, how their subsectors operate, how they interconnect, and where the real risks and opportunities sit.

These studies can help form the analytical bedrock of investment decisions, both in the public credit space and in potential impact investments within the private credit universe. Our Global Healthcare Sector Study is one such example of this approach, reflecting both the sector’s close relationship to our client PFZW’s participants and our decision to expand coverage of healthcare within the team.

Healthcare is one of the most complex sectors to invest in and accounts for roughly 10% of GDP across developed markets. It sits at the heart of public welfare, yet it spans pharmaceutical innovators, medical technology manufacturers, hospitals, diagnostics laboratories and health insurers - each with distinct economic models, regulatory regimes and credit profiles.

Understanding these nuances is critical for a team allocating capital with both financial and sustainability objectives. Our Credit team set out to build a single, rigorous reference framework covering how the sector works - from drug discovery pipelines and patent cliffs to medical device approval pathways, innovation trends and the dynamics of managed care.

Understanding how new medical products reach market, or how a hospital group generates resilient cash flows allows our analysts to distinguish and invest in companies that deliver durable, positive health outcomes as well as providing new innovative processes and devices that help ease patient burden of living with long-term conditions and improving quality of life - thereby support PFZW's sustainable and health ambitions.

Case study: Insulet Corporation

One such positive outcome was the study's dive into Medical Technologies (MedTech) that provided long-term improved outcomes for patients whilst managing their access and affordability, and allowed for the team's investment in Insulet, the medical technology company behind the Omnipod insulin-delivery system.

Insulet sits squarely within a positive health-outcomes theme: its tubeless, wearable technology improves quality of life and management for people living with diabetes (one of the world's fastest-growing chronic conditions) as well as its provision through pharmacies meaning lower co-pay insurance pressure for patients.

For the millions of people living with diabetes, daily management is relentless: multiple injections, tubes, pumps clipped to clothing, and the constant mental load of staying in control. Insulet's Omnipod reimagines that experience. It is a small, tubeless, wearable "pod" that delivers insulin discreetly - no tubing, no bulky hardware, no injections at mealtimes.

The result is a dramatically easier form factor that fits into everyday life rather than dominating it. That simpler design translates directly into quality of life. Users can swim, exercise, sleep and work without managing tubing or visible equipment and because the system integrates with continuous glucose monitoring to automate insulin delivery, it helps users spend more of their day with blood glucose in a healthy range.

This is precisely the kind of company PGGM’s Credit Team is built to identify via sectoral studies, whilst also maintaining a 3D outcome in mind. We aim to maintain our sector studies as living documents so as new risk, return or sustainability themes emerge, we will keep deepening our understanding, and extending the same rigour to other sectors across our credit universe.