Sustainable Finance Disclosure Regulation (SFDR)
The HPF complies with the Sustainable Finance Disclosure Regulation (SFDR), the European disclosure regulation on sustainable investments. Below you can read how the HPF meets the requirements.
Publication information integration sustainability risks (article 3)
The HPF has a policy with regard to Socially Responsible Investment (the SRI policy). This takes into account environmental, social and governance considerations, also referred to as ESG. We believe that a controlled integration of these aspects into our investment strategy and decisions can go hand in hand with aligning our investment return / risk objectives with our ambition to maintain the purchasing power of pensions. The guidelines for integrating sustainability risks into investment decision procedures can be found in our SRI policy.
Due diligence: adverse effects on sustainability (Article 4)
Under the SFDR a pension fund must indicate whether it takes the main adverse effects of investment decisions on sustainability factors into account.
The HPF takes various ESG criteria into account in its investment decisions. However the HPF does not specifically consider the adverse effects of investment decisions are on the sustainability factors as defined in article 4 of the SFDR. The HPF has the following reasons:
- The technical specifications of the SFDR to which this report must comply have not yet been finalized by the EU. It is expected that this will be the case from 1 January 2022
- In addition, in line with the International Socially Responsible Investing Covenant Pension Funds (IMVB Convenant) and the timelines mentioned there, the HPF has formulated a tightened socially responsible investment policy in 2020, which will be implemented in 2021. As this implementation is still ongoing, the HPF does not yet take into account the main adverse effects of investment decisions on sustainability factors within the meaning of Article 4 of the SFDR.
- The HPF has also opted to use certain ESG criteria as a measure the consequences on sustainability factors that are in line with the vision of the pension fund. The HPF therefore does not exactly follow the formulated indicators defined by SFDR.
- Last of all, pension funds that take the unfavorable effects of investment decisions on sustainability factors into account have to report on a large number of indicators. The fund also dependence on the information about unfavorable securities that the asset managers and other data providers can offer. This can possibly lead to additional, labor-intensive and expensive reporting. These market parties are also still busy producing such reports.
The HPF wants to implement its socially responsible investment policy in 2021 in accordance with the IMVB Covenant, and at the same time assess whether it can comply with the above mentioned reporting obligations of SFDR before making a final decision on this subject. According to the SFDR, the HPF has this option of postponement.
Transparency about remuneration policy (Article 5)
The HPF pursues a remuneration policy that contributes to the prevention of (the appearance of) conflicts of interest, the prevention of taking unacceptable or undesirable risks, including sustainability risks, and the prevention of costs that are not in the interest of stakeholders of the HPF.
The remuneration is independent of the return on the investment portfolio. The considerations of possible sustainability risks are therefore not influenced by the remuneration policy of board members or employees.
With this the remuneration policy of board members and employees of the pension fund meets the legal requirements of the SFDR, the Financial Assessment Framework Decree, the Pension Funds Code and the Principles controlled remuneration policy of the Authority on Financial Markets (AFM) and the Dutch Central Bank (DNB).
Classification of the pension scheme: promoting environmental or social characteristics (article 8)
The HPF classifies its pension scheme as a sustainable product that promotes ecological or social characteristics, with partial investment in sustainable products. The HPF has not set sustainable investment as a goal for the pension scheme, however, the HPF does have the vision that as a long-term investor it can contribute to long-term social value creation and wants to implement this by integrating socially responsible investment into its investment policy. This means that the HPF takes environmental, social and governance factors into account in investment decisions throughout the investment process. This classification is part of the SFDR.
The SRI policy explains what the objectives of the HPF are with regard to sustainable investment and how the sustainability characteristics are met. In addition, information is provided on the methodologies, reference benchmarks, ESG indicators, data sources and screening criteria used by the fund.
Overview per investment category
The overview below shows per investment category in which the HPF invests which methods are used for the implementation of the SRI Policy.