Investing in UN targets, with return on investment

Last year, the UN set out the “Sustainable Development Goals” (SDGs) for 2030. A set of 17 highly ambitious goals relating to climate, health care, education and further topics. In the coming 15 years, we will need all hands on deck, and we will need a contribution from major institutional investors to achieve these goals.

APG and PGGM aim to take their role in this transition towards a more sustainable world. Together, we invest funds for pension funds such as ABP and PFZW, managing over 600 billion euros in assets. We cannot make concessions to the financial results to be achieved for beneficiaries. At the same time, we are committed to using our investments to contribute to realizing the SDGs.

On behalf of ABP and PFZW, and our other clients, we are significantly increasing our investments into sustainable solutions. From now on, we will refer to such investments as Sustainable Development Investments (SDIs). These investments must fulfill the regular risk return requirements, and they must also provide a substantial and measurable contribution to one or more SDGs.

A new aspect is that our clients are explicit about the specific societal goals they want to align with ; where they want to invest their beneficiaries‘ money in - not just where they don’t want to invest in. For example by supporting the UN SD goals relating to education or health care, without compromising on the financial result.

As institutional investors are shifting part of their assets to companies and other investments with a higher contribution to the SDGs, they are issuing a key signal to the relevant companies, their sectors and the market place as a whole. With our investments, we also stress the importance of being able to measure their contribution.

This offers companies the option of profiling themselves with the solutions that their products and services represent in the light of a more sustainable world. This is work in progress, both for companies and investors. Simultaneously, it is also a source of innovation and motivation. A tool for customer loyalty and retention.

APG and PGGM have been closely collaborating on this new approach. Asset managers MN, ACTIAM and Kempen have also worked intensively on the theme in the past year. The large Swedish pension funds are also on board. Other institutional investors are invited to join.

This week, the investment industry will gather at the Principles for Responsible Investment (PRI) conference in Singapore bringing together leading global institutional investors. We will promote the importance of a shared definition of Sustainable Development Investments and encourage other major institutional investors will take similar steps. Together we can change the world to make to make it a better place to live and retire in.

Eduard van Gelderen, Chief Investment Officer, APG
Eloy Lindeijer, Chief Investment Officer, PGGM

Read statement: 'Institutional investment into the Sustainable Development Goals'. (pdf)