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As of the end of 2019, we sold virtually all officially classified laggards, except for 16 (0.4 % of the number of companies in the portfolio). We also want to sell these, but that was not yet possible at the end of 2019, due to, for example, trade restrictions. |
The figure below shows the classification of the investment portfolio and that of the investment universe as of the end of 2019. |
[4] |
Figure 1 Leaders, laggards and potential improvers: portfolio vs investment universe (% of number of companies) [4] This applies to the listed equity and credit portfolios, including investments in listed real estate |
APG Responsible Investment Report 2019 16 |
3 Exclusion |
APG Responsible Investment Report 2019 17. |
The pension funds we work for do not want to invest in certain companies, countries and products. We put these on our exclusion list. |
3.1 Product exclusion. |
We do not invest in manufacturers of weapons that are prohibited according to international treaties that the. |
Netherlands has signed. In concrete terms this includes companies that are involved in manufacturing cluster bombs, anti-personnel (land)mines and chemical and biological weapons. We also do not invest in tobacco factories and companies that are involved in the production of (essential parts of) nuclear weapons. At the... |
[5] |
We may invest in manufacturers of weapons that are not prohibited, provided they are attractive in terms of risk, return, cost and sustainability. Among the participants of our pension fund clients are employees of the police and Defense. Without weapons, the police would not be able to maintain public order and an arm... |
3.2 Companies that do not honor worldwide agreements. |
Our clients want the companies we invest in to respect the principles of the UN Global Compact in terms of human rights, labor conditions, the environment and combating corruption. As in 2018, there are three companies on our exclusion list due to violating these principles: the Chinese energy company. |
PetroChina, the Japanese energy company Tokyo Electric Power. |
Company and the American supermarket chain Walmart. |
Unlisted companies. |
There are only listed companies on the exclusion list. In contracts with external asset managers it is specified that they must also apply our exclusion policy to unlisted companies. The list that is used for this purpose includes another 119 companies. External managers do not have to apply the exclusion policy to unl... |
Index investments and ETFs (investment tools that follow an index) are not on the list either, because they are needed to manage the investments efficiently. We guarantee for 99% of our investment portfolio that it does not include shares and bonds of companies on our exclusion list. |
3.3 Exclusion of government bonds. |
When the UN Security council imposes an arms embargo on a country, we no longer invest in government bonds of that country. After the arms embargo against Eritrea had been lifted in 2019, we removed this country from our exclusion list. At the end of 2019, there were ten countries on this list. |
[5] The list is available on apg.nl. |
APG Responsible Investment Report 2019 18 4 Investing in the Sustainable Development Goals |
APG Responsible Investment Report 2019 19. |
At the end of 2019, APG had invested € 72.3 billion in companies that contribute to the Sustainable Development Goals. |
4.1 Contributions to the Sustainable Development Goals. |
We actively search for investments for our clients that contribute to the Sustainable Development Goals (SDGs). These were set up in 2015 by the United Nations to create a better and sustainable world. Examples are good education for everyone, climate action and accessible healthcare. These goals are so ambitious that,... |
In collaboration with PGGM, APG has developed a framework to determine which companies contribute to the Sustainable. |
Development Goals with their products and services. We call these investments Sustainable Development Investments (SDIs) [6]. Just like all other investments in our portfolio, SDIs must meet our criteria for return, risk and cost. If a company realistically contributes to the achievement of the SDGs, we see this as an ... |
4.2 Cooperation. |
It is important to us that investors, such as pension funds, cooperate to achieve the Sustainable Development Goals. For this reason, we took the initiative, in collaboration with PGGM, to announce the establishment of an SDI Asset Owner Platform in 2019. In 2020, we officially launched the platform together with Austr... |
Management Corporation. Based on artificial intelligence powered technology, institutional investors will gain insight into the degree to which their investments contribute to the SDGs. |
Users of the SDI standard of the platform use a common definition of SDIs. This allows them to speak with companies in one voice and report about the way they invest in and contribute to the SDGs in a comparable way. |
In addition, led by the Secretary General of the United Nations, we have entered into a collaboration with 29 big international companies and investors to fuel investment in the Sustainable. |
Development Goals together. The project, named Global. |
Investors for Sustainable Development (GISD), is set to run for two years for the time being. |
Promising technology for paraplegia patients. |
SDG 3: Good health and well-being. |
Private equity investment GTX Medical has developed a unique therapy to help people with paraplegia to move their legs again. This is done with an implant that delivers electrical currents to the damaged spinal cord. The initial results are promising; so far, eight patients have been enabled to walk again, thanks to a ... |
GTX Medical is located at the High-Tech Campus in Eindhoven and at the Technical faculty and the faculty of Bio-science (EPFL) in Lausanne (Switzerland). The therapy is based on years of research by Professor Grégoire Courtine, who is connected to the EPFL. |
For our client ABP, we invest in GTX Medical through Inkef. This is a venture capital investor that ABP and APG started in 2010 in order to invest in promising new companies in Europe. |
[6] Since 2017, we report in line with our SDI definition. For 2016 and 2015, we used HSI figures. |
APG Responsible Investment Report 2019 20 |
APG Responsible Investment Report 2019 21 |
4.3 Sustainable cities and communities. |
We have invested € 24.3 billion [7] in sustainable real estate. We particularly contribute to SDG 11 – Sustainable cities and communities. We qualify real estate as SDI if it scores four or the maximum five stars in the annual sustainability study of theGlobal Real Estate Sustainability Benchmark (GRESB). This means th... |
[8] |
We want all of our real estate investments to report to GRESB. |
This is currently the case in 87% of the (value of) the funds. For our direct investments in real estate, we make participation in. |
GRESB mandatory. New investments also must have a rating of at least four stars within three years. The scores of the funds we invested in in 2019, are in the overview below. |
In 2019, GRESB also gave us insight into the portion of our operational real estate investments that has a sustainability certificate. At the end of 2019, this comprises about 20% of all square meters reported to GRESB. This is well above the average (the GRESB Global Average) of 15.8%. |
4.4 APG is one of the biggest investors in green bonds. |
Among our SDIs, there are also many green, sustainable & social bonds (hereinafter: ‘green bonds’). These are bonds issued by companies and (semi-) government agencies for the financing of social and sustainability projects. |
APG is one of the biggest investors in this market. In the last few years, we have built a good relationship with parties that want to issue such bonds, as well as with bank syndicates, regulators and certification bodies. We use our network, experience and knowledge to further develop the market. |
It is important that companies, agencies and governments that are considering issuing green bonds know what we expect from them. This can eliminate any worries about investors’ reactions and therefore contribute to the further development of the market. APG has published Guidelines for Green, Social and. |
Sustainable Bonds to that end. APG also organizes an annual roundtable meeting with market parties to discuss our expectations for green bonds. We seek these collaborations to encourage companies to issue high-quality green bonds. |
[7] This number relates to direct investments in real estate. The indirect investments through shares in listed real estate are not included. [8] The GRESB rating indicates how sustainable a real estate company is compared to the other real estate companies that are evaluated by GRESB. Real estate in the top 20% gets ... |
APG Responsible Investment Report 2019 22. |
In May 2019, we invested in the first green Dutch government bond. With the returns, the government finances the generation of sustainable energy, making homes more energy-efficient, bicycle storage at the Utrecht Central train station, clean transport and reinforcing the dikes. The return on this bond is comparable to... |
Netherlands. |
This green bond meets the highest standards. |
[9] For green government bonds, we use the same requirements with respect to return, risk and costs as for all other investments. |
Enel issues the very first SDG bond. |
SDG 7: Affordable and clean energy. |
On behalf of ABP, bpfBOUW and SPW, we invested in the first ‘SDG bond’ in 2019. This was issued by the Italian energy company Enel. This company used our knowledge and advice in the development of this sustainable loan. Within the context of SDG 7 (Affordable and clean energy), Enel has pledged that by the end of 2021 ... |
[9] This means it is recorded what the return is used for, that clear, sustainable criteria were complied with and the government annually reports about the expenditures and their effect on the environment. |
APG Responsible Investment Report 2019 23 5 Human rights and working conditions |
APG Responsible Investment Report 2019 24 gain insight into the human rights performance of the G companies we may invest in; increase companies’ awareness; G have a starting point for discussions with companies about G human and labor rights. |
Do we have investments in companies that are active in the G sector in question? |
Is the problem serious and could it have an impact on our G investments? |
Do we expect that we can get companies to make G improvements? |
APG wants the companies we invest in to respect human rights. The point of departure is the UN Global Compact with principles for companies’ business practices in terms of human rights, employment terms and conditions, the environment and combating corruption. |
5.1 Human rights benchmark. |
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