Navigating 3D Investing

Homepage
Investment Management Overview
Navigating 3D Investing

PGGM invests on behalf of pension fund PFZW through a single integrated approach, in which return, risk and sustainability are weighed as equal dimensions in every investment decision. We call this 3D investing: an integrated approach that helps guide investment decisions across these three dimensions. On this page, we show how we put this into practice, what we learn along the way and which questions remain open.

Today's financial reality calls for a clear course. Arjen Pasma (Chief Investment Officer) and Noortje Draper Lead (Head of Research a.i.) explain how PGGM integrates return, risk and sustainability into one investment process, and why this is a route without a fixed endpoint.

What is 3D investing?

Within 3D investing, we build a portfolio in which return, risk and sustainability are weighed equally in every decision. The foundation of this approach is Total Portfolio Management: we manage the portfolio as one integrated whole, assessing every investment decision on its contribution to the total of return, risk and sustainability rather than on individual asset classes or positions. This is guided by the principle of know what you own: every investment must be explainable in terms of its contribution to these three dimensions.

3D Investing

Return

We aim for returns that are in line with, or better than, the market, consistent with the portfolio's risk profile. Financial performance is assessed in relation to the economic, social and ecological developments that shape the portfolio's long-term resilience and value creation. Within 3D investing, return is never considered in isolation from risk and sustainability.

Risk

At PGGM, risk management goes beyond managing financial volatility. It means maintaining a thorough understanding of potential risks in both the short and long term, including risks that are not (yet) reflected in the current value of an investment. We assess both the influence of external developments on the portfolio (outside-in) and the influence of our investments on society and the environment (inside-out).

Sustainability

For PGGM and PFZW, sustainability defines the boundaries within which a resilient and future-proof economy can develop. In practice, PFZW's sustainability framework consists of three layers. The first layer consists of inclusion criteria: minimum standards for products and conduct, based on internationally recognised frameworks such as the UN Global Compact and the OECD Guidelines. Investments that do not meet these standards are excluded from the portfolio. The second layer focuses on alignment: we steer towards a positive contribution by aligning a growing share of the portfolio with the SDGs and the Paris Agreement. The third layer focuses on impact and improvement: on PFZW's focus themes of climate, nature & biodiversity, and people & health, we invest specifically in measurable impact. Through shareholder dialogue, we hold companies accountable for their sustainability performance and support continued improvement.

What 3D investing looks like in practice differs by asset class and context. The cases below each illustrate a different angle: knowledge sharing at sector level, portfolio construction through external managers, and capital steering in the credit market.

Navigating 3D Investing

What is 3D investing?

3D investing in practice