Sustainable investment management
We recognize that the world faces challenges regarding sustainability. We take a balanced position on this issue. We take steps to have a positive impact on the environment by explicitly considering sustainability in the execution of portfolio management and fiduciary advice in consultation with the pension fund clients with whom we partner to meaningfully integrate sustainability into policy and execution.
The focus is on adding real value by making impactful sustainable asset management decisions. Through asset management advisory and execution, we are committed to enabling the growth of sustainable businesses, which we believe are vital to improving the environment. At the same time, we understand that the transition to a truly sustainable society also means investing in more traditional sectors to safeguard participants' pensions.
When providing asset management advice and execution, we pay attention to sustainability. When selecting and monitoring all asset management mandates, we take into account the various sustainability themes that our pension fund clients consider important. It is important that sustainability is part of the corporate culture of the asset managers where (parts of) the asset management are outsourced. For this reason, whenever an asset management mandate is selected, we consider whether asset managers comply with laws and regulations (SFDR) and generally accepted sustainability principles (UN Global Compact).
When executing asset management, we can fully tailor specific sustainability considerations of our clients because we have our own in-house portfolio management. This means we are able to implement virtually any policy.
Exclusion Policy Based on Sustainability Criteria
DPS excludes specific companies and countries from investment, while ensuring that the wishes of DPS' clients are always honored. In particular, companies that conduct themselves in a manner not compatible with the UN Global Compact’s Ten Principles are excluded from investment by DPS.
Carbon reduction
Since 2018, DPS has set a carbon reduction target for the equity portfolio managed internally by DPS.
At the end of 2021, a tightened target was set to further reduce the CO2 emissions of the investment portfolio by 55% by 2030 compared to the benchmark, baseline measurement as conducted in 2016 for the equity, investment grade credit and high yield US asset classes. DPS aims to achieve zero CO2 emissions (100% reduction) by 2050.
Impact bonds
Through impact bonds, DPS invests on behalf of its pension fund clients in investment opportunities that can help solve social and environmental problems, such as poverty in developing countries or climate change. Therefore, investing in impact bonds provides a way to make a positive contribution to social and climate-related projects.Impact bonds are also defined as Green Bonds, Sustainability Related Bonds and Social Bonds.
Based on its sustainability beliefs, DPS invests at least 2.5% more than the mandate benchmark in impact bonds in the various fixed income mandates managed internally by DPS (nominal government bonds, inflation-linked, high yield and corporate bonds). Each year we evaluate whether this allocation should be increased further.
Monitoring
In 2015, the UN formulated the 17 Sustainable Development Goals (SDGs) as part of the "2030 Agenda" for sustainable development.
The UN considers these SDGs the most urgent development goals. The development goals include poverty reduction, access to health care, education, sustainable energy and climate change.
The UN's ambition is for governments, businesses, investors and individuals all to do their part to achieve these goals. DPS measures the contribution of its SDGs from the equity and corporate bond asset classes.
