Philips Pensioenfonds has partnered with BlackRock and Qontigo, an index and analytics provider, to launch the iSTOXX PPF Responsible SDG Index. The new index is Philips Pensioenfonds’ benchmark for its €4.5bn developed market equity portfolio, which BlackRock manages. The portfolio integrates four UN Sustainable Development Goals (SDGs).
The integrated SDGs are as follows: Good Health & Wellbeing (SDG 3), Sustainable Cities & Communities (SDG 11), Responsible Consumption & Production (SDG12), and Climate Action (SDG 13).
The index was created to increase the overall weighting of companies to the four targeted SGDs by, at minimum, 20%, raising exposure from 15% to 35%. The index also aims to reduce greenhouse gas (GHG) emissions per Euro of revenue by 30% when compared to the standard benchmark.
Monique Donders, country head of BlackRock Netherlands, stated: “Together, we have come up with an innovative approach that achieves meaningful SDG alignment without sacrificing on cost or risk/return profile.” She continued, “It clearly shows that Dutch pension funds are again at the forefront of using their portfolios to combine positive sustainable as well as financial outcomes for their beneficiaries.”
Hamish Seegopaul, managing director for R&D ESG and quantitative indices at Qontigo, said: “The integration of multiple sustainability objectives in a risk-controlled investment framework requires careful consideration of the inherent trade-offs. We take a consultative and collaborative approach in working with clients and partners to ensure we can develop index solutions targeted at achieving specific outcomes.”