A good pension at the lowest possible contribution—that is our aim. This is why we invest, in a responsible manner with an appreciation for people, the environment and good governance.
We invest for a good pension for everyone, now and in the future, in exchange for an affordable contribution. This is only possible by investing our pension assets.
We have to invest, because simply saving the deposited pension contributions does not produce enough to be able to pay future pensions. We expect a return of more than 5% per year on our invested funds over the long term.
We do not invest haphazardly to achieve the highest possible return. Our investment professionals continually assess whether the risks we take counterbalance the expected return.
We invest our pension assets across the entire world in many different investments.
If a certain type of investment, or a certain sector or a certain country is not performing well, we want to prevent our investment return from being affected adversely by this. This is why we invest in more than 100 countries, in thousands of different investments.
A good rate of return against acceptable risks
Every investment has its own risks. Depending on the economic situation, one investment will entail a higher risk than another investment. The higher the risk, the higher the expected return.
With our investment portfolio we attempt to achieve the best possible return at an acceptable risk. To achieve this, we combine different types of investment that each has its own risk and return profile.
Expert and reliable process
Our investment portfolio is the result of a meticulous investment process, whereby we call on expert professionals throughout the organization.
Also view the Investments Declaration.
Board members discuss investment policy with participants
Early this summer ABP organized three meetings for its participants to discuss its responsible investment policy. ABP’s board members explained the new policy and presented cases about investment in sectors that are controversial among groups of participants, like tobacco and fossil fuel companies.
The meetings took place in the cities of Den Haag, Eindhoven and Zwolle. To promote open discussion, ABP decided that access to each meeting would be limited to about 40 people.
Over the past 20 years we have achieved an average return of over 7% on an annual basis. An increased focus to achieve this return in a sustainable way has increasingly become an area for attention.
ABP’s total invested assets amount to €356 billion (as at June 30, 2015). Of this, approximately half is invested in Europe, one third in the United States and the remaining 17% in the rest of the world. In 2014, the CO2 footprint of our listed investments dropped by 10%.
As one of the largest pension funds in the world with influence on companies and governments, we feel a responsibility to invest in a socially responsible and sustainable way.
How do we exercise influence?
As a major investor we can influence the decisions made by the companies in which we invest. We consider it important to use our influence. For example, we aim to use our voting right at every shareholders’ meeting.ABP’s approach to corporate governance is set out in the ABP Corporate Governance Framework.
Excluded countries and companies
Companies that are suspected of violating national and/or international laws and regulations and countries that are subject to a UN arms embargo are added to our exclusion list. Our investors are prohibited from investing in the countries and companies on our exclusion list.
On January 11, 2018, ABP announced that it was going to exclude producers of tobacco and nuclear weapons. At that time we also announced that it was our goal to dispose of all of these investments within one year (approx. €3.3. billion). The reference date for this list is July 1, 2018, and therefore does not yet include any tobacco and nuclear weapon exclusions. We expect to be able to have these exclusions on our list for January 1, 2019.
Responsible Investment Report
Our annual Responsible Investment Report contains extensive information about the way in which we devote our efforts to investing in socially responsible and sustainable ways throughout the world.
What is ABP's approach to ... ?
An important part of the new investment policy that we adopted at the end of 2015 is engaging with participants and civil society organisations on the way we invest. As part of this process, we shall be presenting more information on those investments that (some of) our stakeholders find problematical and also highlighting particular themes in our investment practices. This will be done through position papers published twice a year.
The latest position paper describes ABP's approach to remuneration policy.