A good pension and a better world

Bpf Koopvaardij has assets of approximately € 4.5 billion. The fund invests these assets in shares, real estate and government and corporate bonds. The fund gets something in return, i.e. return in the form of interest, dividend, rent and value increase. In this way, the pension contributions become more valuable. Bpf Koopvaardij opts to invest its assets, as this generally yields a higher return than saving. The fund has Investment Portfolio Holders who are also board members. They prepare the investment policy and advise the board. This policy is not arbitrary, the investment are socially responsible, e.g. in companies that have climate-neutral products or services or treat their employees correctly. And vice versa, not in companies that make products the fund does not support. Good pension Of course it sounds nice: socially responsible investment. But the key question is: does it cost money? The short answer is no. Bpf Koopvaardij has opted for a strategy that leads to financial and social returns. In other words: good for the member's wallet and good for the planet. “It should not cost money”, says Ton Zimmerman, one of the Investment Portfolio Holders. “And it doesn't have to either. We choose to invest only in companies that are profitable in the long term. After all, the main aim is a good pension, not to reduce pensions but to index them.” Bpf Koopvaardij is aware of its social responsibility. “So our actions need to reflect that. We want to prevent negative effects on society and make a positive contribution where possible. This affects not only our investments, but also the world around us. And that is the world in which our members will retire.” Theory and practice A positive contribution in other words. What is that exactly? The fund does not choose its investments randomly. When choosing investments, the fund uses four tools. The first is: do companies comply with ESG factors? The E stands for Environment. The S is for Social and relates to issues such as working conditions, health, safety and human rights. The G stands for Governance. For example, is a company well managed and does it adhere to legislation? “You often see that companies that score well regarding these factors are also profitable in the long run. So the two go together, the one leading to the other. And that is what we want, that long term.” The theory may sound simple, the practice is occasionally stubborn. For example, last spring it emerged that Bpf Koopvaardij was investing in a company that had entered into a partnership with a company in Myanmar. The latter company was one-third owned by the military junta in that country. So the company in which Bpf Koopvaardij was investing was directly associated with the human rights violations taking place in Myanmar at that time. We started an investigation, but fortunately the company in which we were investing had already terminated that cooperation before the investigation was finished. So we did not have to sell our investments. It just goes to show that sometimes you think you are doing the right thing and it turns out not to be the case.”

Excluded While ESG is mainly about what Bpf Koopvaardij does want to invest in, the second tool, exclusion, is exactly the opposite. First of all, there are all kinds of international treaties that prescribe what you may not invest in. “For example, in companies dealing with anti-personnel mines, cluster bombs and chemical weapons. We also do not invest in undesirable products, such as tobacco and fur. Neither in products that we know will not survive in the long term, such as thermal coal.” Also important in the context of energy transition: how much carbon do companies emit, directly or indirectly? “On the basis of certain criteria, we have excluded 39 additional companies, in which we no longer invest. These had a value of two per cent of our investment portfolio, but our carbon footprint subsequently dropped by about 20 per cent. While our profit growth increased from 11.34 to 11.47 per cent. So we even earned a little from this decision.” Countries may also be covered by exclusion. “We only want to lend money to countries that meet certain ESG criteria and that we expect to repay the money, plus interest.” The fund can exclude countries for financial reasons, such as the level of government debt and whether a country can repay that debt. “For these reasons, we do not invest in Spain and Italy.” The fund also uses social criteria: is there corruption in a country, how democratic is it, how vulnerable is it to climate risks and how are social developments progressing? “Russia and Myanmar are excluded.” Taking a stand So there are companies – and countries – that fall by the wayside because of the exclusion policy. But that does not make the companies in which the fund does invest holy grail. There is always room for improvement. Therefore, Bpf Koopvaardij opts for dialogue as its third tool: the fund makes its voice heard. This can be achieved, for example, by voting at shareholders' meetings. And by taking a stand together with other shareholders, for example by demanding more action on combating global warming. “Here, too, the goal is to make the world a little better in the long run. Sometimes you can achieve this more effectively by being active as a shareholder than by not investing in a company at all.” A pressing question in this category: to invest or not to invest in oil and fossil fuels? “We eventually decided to continue investing in them. This allows us to exert influence at these companies. And we know that they have a lot of expertise when it comes to innovation. So our expectation is that they can and will make great strides in a relatively short time.” Balancing The fourth and final tool that the fund uses is that of positive impact: where can it contribute with its investments to good developments, for example: more affordable housing? “We have a certain amount of property with a rent between 600 and 1200 euros per month. Expanding this property is not easy in view of the rising construction costs. The range on offer is limited. For the fund, it remains a balancing act between financial and social return. And so we are constantly tightening our policy, on all fronts. But always with financial and social returns in mind. Members can rest assured of that.” ←