Philips Pension fund launched iSTOXX PPF Responsible SDG Index using SDI AOP data

The iSTOXX PFF Responsible SDG Index has been developed by Blackrock, the manager of the portfolio, and Qontigo. The index - which is designed as a broad equity benchmark - is built using datasets including the Sustainable Development Investment Asset Owner Platform and has been constructed to increase overall portfolio weighting of companies which sell products and services with positive contributions to the selected SDGs by at least 20%. 

Philips Pension fund has aligned its €4.5bn developed markets equity portfolio - almost 20% of its assets under management - to four UN Sustainable Development Goals (SDGs): Good Health & Well Being (SDG3), Sustainable Cities & Communities (SDG 11), Responsible Consumption & Production (SDG12), and Climate Action (SDG13). As part of the new investment strategy, the SDG index excludes companies that are obstructive to these goals, leading to the exclusion of roughly 200 companies with a value of around €300m that were deemed “detrimental” to the goals.

Anita Joosten, Chief Investment Officer of the fund:
“This new custom benchmark enables Philips Pensioenfonds to align the investment portfolio with the sustainability preferences of our beneficiaries while retaining a diversified portfolio with a low cost implementation. Because the SDG profile materially improved and this portfolio makes up almost 20% of our total AUM it represents an important step in aligning our investments to the SDGs. In the future, we seek to integrate the SDGs in other asset classes and portfolios too.”

Today's announcement marks the second time data from the SDI AOP is used to build investable indices, after APG launched the iSTOXX APG World Responsible Low-Carbon SDI Index in Spetember. 

Read the full press release here.