APG and Sustainability
Rob Lake, Head of Sustainability & Governance
17 September 2010
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Introduction to APG
• Asset Management for pension funds• Pension assets of around €240 billion (as at 31 Dec ‘09) • More than 20,000 employers and 4,000,000 participants• > 30% of all collective pension schemes in the Netherlands• Strong commitment to integrate ESG across the portfolio• International network and offices in NY and HK• We take a long term investment view
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APG’s Responsible Investment Policy
The main purpose:
• Contribute to APG’s risk-adjusted financial return
• Demonstrate social responsibility
• Contribute to the integrity of financial markets
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APG’s Responsible Investment Policy: Implementation
• Integrating ESG into the investment process• Promoting compliance with the UN Global Compact and raising
ESG standards through engagement with companies• Actively exercising voting rights• Investing in sustainability solutions • Engaging with legislators and policy makers
• Excluding companies are directly involved in the production of weapons prohibited under Dutch or international law, and companies that do not comply with the UN Global Compact
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• Global Survey on integration of environmental practices– Listed Real Estate companies: more than 200 companies– Non-listed funds: close to 500 funds
• In conjunction with: – The sector: input from large European REITs– Other investors: PGGM, USS– Leading real estate associations: EPRA, INREV and ACSI– Maastricht University
• IPE Real Estate platinum award 2010 for ‘Outstanding Industry Contribution’
Global Environmental Real Estate Survey
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Sustainable RE companies perform better
+15% since Dec-06
Source: J.P. Morgan Europe Equity Research September 2010
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Unlisted assets – sustainability standards and reporting in contracts
Commodities
Forestry - FSC
Mining – IFC Standards
Biofuels – Roundtable on Sustainable Biofuels
Soy – Roundtable on Responsible Soy
Infrastructure
European infrastructure fund – new policy developed
Hedge funds
ContourGlobal – energy in emerging markets: IFC
environmental and social standards
Real Estate
Global environmental survey
All new funds will have to complete the APG survey from
Q2 2011
Committee on Investment Proposals
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• Korean tire producer, 6th largest worldwide• Concerns about working conditions and safety performance
– Health risks: 15 fatalities related to serious diseases in 3 years time
– Financial risks: Health related claims
• Upon APG’s request Hankook Tire improved its performance:– Improved standards
– Regular medical checks
– Clinic opened with company doctor
– Sustainability report in 2010
Engagement - Hankook Tire
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• Riverine tailings disposal at Grasberg mine
• 25 April 2008 – engagement started• 11 June 2009 and 9 June 2010:
shareholder resolution (32.5% and 33% in favour): appoint a board member with environmental expertise
• Meetings with CEO• Engagement continues
Engagement – Freeport-McMoRan
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Investing in sustainability solutions
Renewable Energy e.g. €185m in infrastructure
funds
Clean technologiese.g. €250m private equity Microfinance
approx. €150m
In total around €2 billion
Carbon reduction approx.
€500 million in carbon trading and
reduction
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Summary
• Contributing to improving risk-return profile
• Demonstrating social responsibility
• Contributing to integrity of financial markets