Our responsible investment policy is guided by laws and regulations, guidelines, codes and covenants.

The United Nations
The United Nations (UN) has established several guidelines and principles that provide guidance on sustainable business practices. In our policies, we take into account the following UN guidelines and principles:

• Global Compact (UNGC): This consists of 10 criteria in relation to human rights, employment rights, the environment and anti-corruption. These conditions matter to us because we want to invest in companies that do not violate these conditions.

• Principles for Responsible Investment (UNPRI): this sets out the responsibilities investors have in terms of ESG (Environment, Social, Governance).

• Guiding Principles on Business and Human Rights (UNGP): These principles set out a framework for companies to comply with human rights and are divided into, ‘protect’, ‘respect’ and ‘remedy’.

• Sustainable Development Goals (SDGs): We place a high value on the UN’s Sustainable Development Goals – SDGs – to achieve a sustainable world.

OECD guidelines
The acronym OECD stands for: Organisation for Economic Co-operation and Development. The OECD guidelines provide businesses with concrete starting points for dealing with chain responsibility, human rights, child labour, the environment and corruption. The OECD guideline that applies specifically to institutional investors such as our pension fund is as follows: ‘Responsible business conduct for institutional investors’. We are expected to use the leverage we have with the companies we invest in to prevent or mitigate any negative impacts. We ask our external fiduciary manager, ESG service providers, asset managers and the companies in which they invest to act in accordance with the above guidelines or to endeavour to do so.

Covenant on International Socially Responsible Investment for Pension Funds (IMVB-covenant)
In 2018, we signed the Covenant on International Socially Responsible Investment Pension Funds (IMVB). This is a collaboration made up of pension funds, social organisations, trade unions and the government. The collaboration aims to promote sustainable investments and prescribes best practices, among other activities.

How responsible investing works in practice
Your pension with Shell is invested. As responsible as possible. But how does that work in practice? Find out in this infographic.

You can read our complete policy (pdf) here. 

Positive energy. That is what responsible investing means to us: good for you, good for the world. Investment choices are therefore not only financially driven, but are always considered in relation to the ESG factors of the investment (ESG: Environmental, Social and Governance). In fact, ESG factors influence the investment risk and return of all asset classes.

As a pension fund, we are an engaged shareholder. Companies in our investment portfolio that could be performing better in the area of ESG are included in our engagement programme. In other words, we engage with these companies. We also actively use our voting rights to bring about positive change.

It is our belief that strong corporate governance (G) enhances performance in environmental (E) and social (S) factors. 

When it comes to responsible investing, we have the following objectives:

• we strive to ensure that our responsible investment policy (pdf) and its implementation are compliant with current treaties, conventions, legislation, guidelines, codes and covenants on the subject of investment policy;
• we aim to communicate our choices and results to all our stakeholders in a transparent and comprehensible way;
• we are committed to achieving sustainable improvements in environmental, social and governance areas, such as reducing the carbon intensity of our investments and to focusing on companies with above-average governance performance; and
• to making a positive contribution to the risk and return profile of SSPF investments, with due observance of the thematic preferences of participants.

We enter into dialogue with other companies
We strongly believe that active share ownership is key in bringing about positive change, keeping companies on their toes, and encouraging a greater focus on sustainability. After all, excluding a company and selling shares simply means giving up the influence you have over it.

This is why we challenge companies on their policies and the activities they undertake if, in our view, they are failing to take the environment and society sufficiently into account. This is also known as reactive engagement (‘do no harm’).

We also encourage companies to introduce improvements on specific topics (proactive engagement, ‘do good’). In doing so, we work together with other institutional investors where appropriate.

Engaging in dialogue with companies has been outsourced to EOS, an organisation that specialises in engagement, who does this on behalf of various institutional investors. The guiding principle in these conversations is the EOS engagement policy. We supplement this policy periodically with our own insights. In the process, we regularly review whether the EOS engagement policy is still in line with our objectives.

Want to know more? Check the sustainable results and/or read the complete EOS engagement plan.

How we exercise our right to vote
Some of the pension assets are invested in equities. One of the most important rights of a shareholder is the right to vote. Voting rights allow shareholders to have a say in what decisions are taken at shareholder meetings. When casting our vote, we look closely at whether companies take environmental and social concerns into account and how employees are treated. We also consider it important for there to be sufficient diversity on the board and that the remuneration policy of a company’s top management is transparent and partially linked to sustainable objectives.

We cast our votes through EOS and follow the EOS voting policy. We regularly review whether the voting policy of EOS is adequately in line with our objectives

Read the sustainable results here.

We believe that engaged share ownership – entering into dialogue with companies and using our voting rights – is key in bringing about sustainable change. As an ‘ultimum remedium’, we exclude companies that violate UN and OECD guidelines and fail to make progress on sustainable business practices. The Board of the pension fund decides on any action of this nature on a case-by-case basis. Its assessment takes the (potential) negative impact of its decision on society and the environment into consideration as well as the impact on risk and return. 

When referring to exclusions, we make a distinction between two types of exclusions: statutory exclusions and conduct-based exclusions. When investing in country bonds, we have a policy of inclusion.

Statutory exclusions

We exclude companies that act in violation of the law or treaties ratified by the Netherlands. For this reason, we do not invest in companies that are actively involved in cluster munitions, landmines or chemical and biological weapons. Concerning nuclear weapons, exclusions take place insofar as companies are involved in activities that are in violation of the non-proliferation treaty. If a company is excluded, we also do not invest in loans issued by the company in question.

Conduct-based exclusions

We invest your  pension contributions in a wide range of companies. These companies are periodically screened for controversies. ‘Controversies’ refers to exceeding international standards such as the UN Global Compact criteria. Through engagement, we enter into dialogue with companies with substandard conduct wherever possible. We also exercise our voting rights at shareholder meetings accordingly. The moment a company fails to make sufficient progress, it can be excluded as an ‘ultimum remedium’. We monitor all such companies on a regular basis, to see whether exclusions can be lifted.

Inclusion countries

We make use of an inclusion list when investing in a country’s government bonds. In other words, we do not invest in countries that are not on this list. The list is compiled according to three criteria. First, we look at whether a country has a binding arms embargo from the UN Security Council or the European Union. Another important factor is a country’s creditworthiness. For this reason, we only invest in government bonds from countries with a certain creditworthiness. Finally, we include the World Bank governance scores when compiling our inclusion list.

In 2015, all member states of the United Nations agreed to guide society and the planet on a sustainable path by 2030. In the process, 17 Sustainable Development Goals were presented, often referred to by their abbreviation: SDGs. Our investment policy aims to make a positive contribution to these goals.

A survey conducted among our participants asked which SDGs should receive the most attention. Four sustainable development goals emerged from this survey that align with our Shell identity: Gender equality, Affordable & clean energy, Sustainable cities and communities, and Climate action.

Gender Equality The Universal Declaration of Human Rights states that men and women have equal rights. In everyday life, this is unfortunately not yet the case. This fifth SDG is intended to put an end to that. The aim is to eliminate inequality between men and women in education, health and work by 2030. In addition, there should be equal representation of women and men in political and economic policy-making.

Affordable and Sustainable Energy By 2030, everyone should have access to affordable, reliable and clean energy. Clean energy is obtained from natural sources such as water, wind and the sun. If we want to achieve this goal, it is necessary to explore these energy sources more closely. This also includes the technology we use to generate clean energy. Also making modern and clean energy accessible in developing countries requires better infrastructure and advances in technology.

Sustainable Cities and Communities Inclusive, safe, resilient and sustainable cities. Everyone should be able to live a good, healthy and sustainable life. This requires a variety of elements such as proper housing, healthy air, clean water, sufficient green space, and adequate access to public transport.

Climate Action Urgent action is needed to combat climate change and its impact. Global warming is already affecting the daily lives and incomes of millions of people. This will only increase in the future.

Our plan  
Climate change is an important topic on our agenda. Through our investments, we aim to reduce the negative impact on the climate into the future. 

Our goal is to offer our participants a secure pension in a world worth living in. Not just now, but also in the distant future. Global warming affects every single one of us. It is therefore vital that everyone does their bit to mitigate the negative effects of warming. As a pension fund, we have an important fiduciary and social responsibility.

Climate change is an important issue for us. With our investments, we aim to reduce the negative impact on the climate into the future. We have therefore drawn up a climate plan where, going forward, we will reduce the carbon intensity related to our investments in line with the Paris Accords.  

We want to offer our participants a quality pension in a world worth living in. Not only now, but also far into the future. Our climate plan focuses on this. Global warming affects all of us. It is therefore important for everyone to do their part to mitigate the negative effects of global warming. As a pension fund, we have an important fiduciary and social responsibility. For this reason, we are striving for a climate-neutral investment policy by 2050.

Climate targets step by step
1. 20% reduction of the carbon intensity of our investments by 2025 as compared to 2022
2. 40% reduction of the carbon intensity of our investments by 2030 as compared to 2022
3. Net-zero (climate-neutral) investments by 2050.

How will we achieve our goals?
• We enter into dialogues with companies;
• We vote at shareholder meetings;
• We are committed to a gradual energy transition. Companies that do not have a viable and ambitious transition plan will be subject to future exclusion for this reason;
• Looking towards the future, we are placing increasingly rigorous requirements on companies’ transition plans;
• We do not participate in new debt (bonds) from companies that do not have future CO2 reduction targets;
• We will be making increasingly rigorous demands on governments; and
• Going forward, we will be increasing our allocation to green investments.

As a pension fund, we subscribe to several international conventions, guidelines, codes and covenants in the area of socially responsible investment. In addition, our policy takes into account our participants’ ESG preferences as well as our own fiduciary social responsibility. Policy making needs to be translated into actions rather than remaining mere words. The 10 points below describe how, as a pension fund, we have integrated our ESG policy into our investment policy:

1. We enter into dialogue with companies (engagement) to bring about positive change (‘do good’) as well as when we believe that companies are not taking sufficient account of the environment and society (‘do no harm’).
2. We exercise our voting rights at shareholder meetings.
3. We do not invest in companies (or in a company’s bonds) that are involved in the production of cluster munitions, landmines or chemical and biological weapons.
4. We do not invest in companies (or in a company’s debt) that are linked to serious controversies.
5. We only invest in a country’s government bonds if it meets certain criteria.
6. We have customised the ESG benchmarks with the aim of reducing carbon intensity and improving the ESG governance scores of companies.
7. We invest in Dutch mortgages and promote a range of sustainable initiatives through asset management.
8. We stimulate investment in green bonds.
9. We encourage our property managers to report and participate in various ESG initiatives (such as GRESB). 
10. We have a detailed climate plan in place to ensure that our investments are climate-neutral by 2050.