Dutch pension fund Philips Pensioenfonds has partnered with BlackRock and Qontigo to align its €370m emerging markets equity portfolio with four UN Sustainable Development Goals.
Managed by BlackRock, the segregated mandate will see Philips Pensioenfonds track a custom equity benchmark, the iSTOXX PPF Responsible SDG Emerging Markets index.
The mandate overweights emerging market companies that are aligned with good health and well-being (SDG 3), sustainable cities and communities (SDG 11), responsible consumption and production (SDG 12) and climate action (SDG 13).
To be included in the index, companies must contribute at least 10% of their revenues to the four UN SDGs.
The index also excludes companies that are harmful to the four UN SDGs while also targeting a 30% carbon intensity reduction versus its parent benchmark.
The segregated mandate accounts for approximately 2% of the pension fund’s total assets.
Anita Joosten, CIO of Philips Pensioenfonds, commented: “Our participants showed broad support for the integration of SDGs in the wider investment portfolio.”
Wilbert Huizing, director of institutional client business at BlackRock Netherlands, said: “This implementation for Philips Pensioenfonds is an example of how clients can customise investment solutions that integrate sophisticated sustainable investment goals.”
Axel Lomholt, chief product officer for indices and benchmarks at Qontigo, added: “We are excited about the strong partnership we have created with Philips Pensioenfonds and BlackRock, and to have jointly designed a solution that integrates multiple sustainability considerations.”
The move follows Philips Pensioenfonds’ decision to run similar a segregated mandate for its developed markets equity portfolio in December 2021.