Take care of our investments

Take care of our investments

As an investor, we believe that we should also manage our investments responsibly, in other words: we should 'take good care' of our investments. This is also called 'stewardship'. Philips Pensioenfonds is convinced that this is good for society and for the value of the investments. This means that we not only monitor our investments on the return to be achieved, but also on social aspects. It also means that we enter into dialogue (engagement) with companies in which we invest and exercise our influence through our voting policy.

We will further explain these three forms of care, or stewardship, below.
 

1. Monitoring our investments

Philips Pensioenfonds sets itself the target of regularly reviewing all its investments against a selection of criteria including the environment, human rights, labour and good corporate governance. Based on research by external suppliers, the pension fund measures the ESG characteristics of the various portfolios. In this assessment, international agreements on standards about corporate social responsibility are used (OECD Guidelines, UNGP’s and UN Global Compact). Currently this is done for all equities, government bonds, corporate bonds and indirect real estate portfolios.

This information has led to classify climate change and biodiversity as a strategic risk that are financially and socially relevent to the Fund. In term of climate risk, we periodically measure the CO2 footprint of the portfolio and carry out scenario tests to map the effects for the portfolio. The Fund also has already taken a number of steps that help to manage climate risks, such as reducing the CO2 intensity of the investments in shares (equity) and entering into a partnership in which pension funds together enter into dialogue with real estate funds about climate impact and risks with the aim of improving climate risk management and reducing emissions. As far as biodiversity is concerned, we have mapped out the risks in 2023, looking more broadly at natural capital such as the availability of raw materials and the quality of the soil. We then analyse whether these risks could affect the Fund financially and to what extent the companies we invest in have a negative impact on biodiversity.  Our asset manager enters into a dialogue on this subject with the companies in which we invest with the aim of assessing whether the companies sufficiently identify and manage these risks.

2. Engagement

The responsible investment policy ensures that our portfolio has a more sustainable character than a portfolio that does not take social aspects into account. This does not mean that we only have 'green' investments in our portfolio. We also monitor our investments for aspects such as the environment and human rights, so that we can enter into dialogue with companies that are lagging behind on these aspects. We call this 'dialogue' or 'engagement'.



For example, companies that violate international guidelines for social responsibility (according to Global Compact, OESO or UNGP's) are eligible for engagement. If this engagement does not lead to the desired change, it can be decided to place this company on the exclusion list (see 'responsible choices'). In the way Philips Pensioenfonds executes voting rights, the results of engagements are taken into account (see 3 'Voting policy').



In addition to entering into a dialogue and exercising voting rights, Philips Pensioenfonds regularly participates in so-called class actions. In this way, the Fund takes legal action against companies that, in the Fund's opinion, have not treated their investors properly.

3. Voting policy

Philips Pensioenfonds invests in shares. Each share entitles Philips Pensioenfonds to vote at the shareholders' meeting of the company concerned. At this meeting, for example, permission is requested from the shareholders for the appointment and subsequent remuneration of directors. By making use of its voting right, Philips Pensioenfonds can indirectly influence the quality of the management of the companies in which it invests.



By making use of its voting right, Philips Pensioenfonds can indirectly influence the quality of the management of the companies in which it invests. This can ultimately also positively influence the value of the shares and limit risks. Philips Pensioenfonds has drawn up a voting policy in order to make the best possible use of voting rights. This policy assumes that companies can only be properly managed if the management of the company is transparent and efficient supervision is carried out. The policy is in accordance with the relevant provisions of the Dutch Corporate Governance Code.