Responsible investing is a means of gaining better insight into the risks and opportunities of a project or a company, enabling us to make better investment decisions on behalf of our clients. This means that our policy for responsible investing is not static, but is updated, as and when needed, to take account of current developments. In 2012, APG has integrated its ESG criteria, even more deeply in our investment processes and decisions. We developed several new instruments for this purpose, including the ‘ESG Dashboard’, the ‘Bloomberg ESG Performance Monitor’ and the ‘ESG Country Risk Monitor’. These also enable us to assess more accurately whether the companies in which we invest integrate sustainability and good corporate governance in their strategy and, for example, whether sustainability aspects form part of their remuneration strategy.
Responsible investing at APG has three goals:
- To contribute to risk-adjusted return on our investments;
- To contribute to the integrity of the financial markets;
- To demonstrate our wider social responsibility.
These principles are based on the following international standards for sustainability and good governance:
United Nations Global Compact
OECD Guidelines for Multinational Enterprises
OECD Principles of Corporate Governance
International Corporate Governance Network
Statement on Global Corporate Governance Principles
Responsible investing is an integral part of APG’s investment process. The influence of ESG factors is continuously analyzed and assessed for our clients across our entire investment portfolio. APG knows from experience that these factors influence the long-term financial performance of companies. This belief consequently helps to define the risk and return potential of the different asset classes. It is therefore important that we integrate sustainability and governance increasingly deeper in our investment decisions. How this is implemented differs from one asset class to the next. During 2012, we took steps to further implement the ESG approach for hedge funds, listed equities strategies and private equity. Sustainability or shareholder rights assessments may lead to a decision not to make a certain investment, to dispose of an investment or to change its size.
During 2012, the S&G team held discussions with roughly 200 companies on various ESG topics. APG engages in dialogue with companies in order to realize sustainability and good corporate governance. When talking with companies, we make clear which standards for sustainability and shareholder rights we advocate on behalf of our clients. In order to reinforce our message we often work with other investors.
Respecting the UN Global Compact Principles
The Global Compact is an initiative of the United Nations (UN) which seeks to make a contribution to corporate social responsibility and helps businesses in achieving goals related to this objective. The Global Compact promotes the ten principles in the areas of human rights, labor conditions, environmental protection and combating corruption.
APG expects companies to conduct their business in line with the UN Global Compact Principles and may divest its interests if dialogue does not lead to improvement. Effective January 1, 2020, APG excluded Walmart and PetroChina due to non-compliance with the UN Global Compact.
APG also does not invest in products that are prohibited by Dutch law or international regulations. This means that we do not invest in companies that are directly involved in the production of land mines, cluster munitions and the firing systems for such munitions and of chemical and biological weapons, or nuclear weapons in contravention of the Nuclear Non-Proliferation Treaty. We also exclude companies that are involved in products or services that are generally considered objectionable in the Netherlands. In 2012, we excluded 14 companies due to their involvement in the production of cluster munitions.
Sovereign bonds UN Security Council arms embargo
APG does not invest in sovereign bonds of countries that are subject to a UN Security Council arms embargo. These embargos are imposed as an enforcement measure in order to condemn violations of international law or human rights.
APG actively exercises its rights as a shareholder. We vote at all the shareholder meetings of companies in which we invest. We publish our voting record and provide an explanation of how we voted.
Our activities in the area of active shareholdership in 2012:
Robust policy frameworks
Nationally and internationally, APG advocates robust policy frameworks to promote sustainability and good corporate governance. We hold regular dialogues with legislators and regulatory authorities on sustainability and shareholder rights. We also contribute to the development of standards aimed at enhancing the integrity of financial markets in the long term.
High sustainability investments
APG actively seeks out attractive investments that promote sustainability. These include investments in sustainable energy, drinking water and waste water purification, waste disposal, schools, and hospitals. Directly and indirectly via our external fund managers, we invest in projects that add value in both respects.
Actively promoting Responsible Investment
APG actively promotes its responsible investment policy in order to promote sustainability and corporate governance. We work with other asset managers and pension funds around the world to increase the impact of the responsible investment policy for our clients. We are active in a number of (international) networks. And we communicate actively about our activities.
The S&G team
|Claudia Kruse is the head of the S&G team. She has worked for APG since April 2009, after having previously worked on the buy- and sell-side in London. Since 2000 she has been working in responsible investment and published on this topic. She has in the past been recognized by Harvard’s Millstein centre for her work on governance. Claudia is Chairperson of the Integrated Business Reporting Committee of the International Corporate Governance Network (ICGN) and is a member of the working group of the International Reporting Committee (IIRC). She also is a member of the General Board of Eumedion.|
|Mirte Bronsdijk is a corporate governance specialist and has worked for APG since February 1, 2020. She mainly focuses on the decision-making process around shareholder meetings and is involved with dialogue and engagement activities with companies on corporate governance worldwide. She additionally researches various topics in relation to good corporate governance. She also takes part in consultations putting forward our views on Dutch and European policy-making on corporate governance.|
|Marta Jankovic is a sustainability and governance specialist at APG since December 2012. She is responsible for advancing the integration of ESG aspects in all the investments in hedge funds, private equity, commodities and other illiquid asset classes. She has worked for more than ten years as a lawyer specializing in investment funds and corporate law. Before joining APG, Marta was legal counsel for SVG Advisers in London, where she chaired SVG’s CSR committee and was responsible for applying ESG principles in investment practice. Furthermore, she is a member of the European Private Equity and Venture Capital Association’s (EVCA) Professional Standards Committee and the EVCA Responsible Investment Roundtable.|
|YK Park is senior sustainability specialist for Asia and works for APG in Hong Kong. She focuses on the integration of ESG factors in APG’s Asia investments. She assesses the ESG aspects of the various asset classes, including real estate, infrastructure and equities in Asia. YK plays a leading role in the dialogue with Asian companies. She has more than ten years’ experience as an investment analyst for international investment banks in South Korea, and worked for three years for the Association for Sustainable & Responsible Investment in Asia.|
|Anna Pot is senior sustainability specialist and has worked for APG since February 2008. Anna is responsible for dialogue with companies on their human rights record, labor conditions and how they deal with the interests of local communities. She is also responsible for managing APG’s exclusion policy. Before she joined APG, she was coordinator of the human rights and business sector program of Amnesty International Netherlands, and was previously fund manager of a sustainable investment fund at ING.|
|Erik-Jan Stork is senior sustainability specialist and has worked for APG since April 2008. Erik-Jan is responsible for advancing the integration of environmental and social factors in the investment process for listed equities and corporate bonds. In this role, and as a climate specialist, he puts a strong emphasis on how companies respond to market changes in the medium-to-long term caused by stricter climate policy and the transition to a sustainable energy infrastructure. He was previously a sustainability advisor at KPMG Sustainability, and before that was responsible for the first company-wide inventory of greenhouse gases at Shell.|
|Sander Paul van Tongeren is senior sustainability specialist and has worked for APG since April 2009. Sander Paul is responsible for all sustainability issues within the real estate and infrastructure asset classes. He is the driving force behind the development of the Global Real Estate Sustainability Benchmark (GRESB). He previously worked for Diageo, Corporate Express and ING, where his positions included that of portfolio manager and business manager of real estate funds. In 2010, Sander-Paul completed his Master of Real Estate at the Amsterdam School of Real Estate.|