London Stock Exchange Group welcomes Pensioenfonds Detailhandel’s FTSE Euro Credit SDG-Aligned Index fund

Working closely with index provider FTSE Russell and asset manager BlackRock, Pensioenfonds Detailhandel is making its third significant sustainable investment based on UN SDGs, with a EUR 3 billion allocation in the credit market. The custom built FTSE Euro Credit SDG-Aligned Index, which is used as the benchmark for the new passively managed fund, is one of the first of its kind.

The new index is designed to provide a diversified bond benchmark. In 2019 and 2020, the pension fund collaborated with the same partners to introduce indices for developed and emerging market equities portfolios representing a value of over EUR 11 billion. With the EUR 3 billion allocation to the credit market, almost half of the assets under management of Pensioenfonds Detailhandel are now in line with selected SDGs.

Pensioenfonds Detailhandel aims to provide a good pension to its 1.2 million participants and is convinced that responsible investing also means creating long term value. The pension fund encourages the companies in which it invests to deal responsibly with their employees, society and the environment. A recent survey by Maastricht University among the fund's participants showed that there is great support for making the investment portfolios more sustainable.

The FTSE Euro Credit SDG-Aligned Bond Index measures the performance of fixed-rate, EUR denominated, investment-grade credit bonds, incorporating a tilting methodology that adjusts index weights according to the specified UN’s SDG framework. The SDGs considered most important by the participants of Pensioenfonds Detailhandel are included in this index:

  • Decent work and economic growth (SDG 8)
  • Responsible consumption and production (SDG 12)
  • Climate action (SDG 13)
  • Peace, justice and strong institutions (SDG 16)

This results in a benchmark that achieves the following when compared with the market-capitalisation weighted ‘parent’ index for corporate bonds only:

  • Carbon emissions reduction 69%
  • Green Bond allocation increase 69%
  • Fossil Fuel Reserves reduction 62%

An additional index overweight is applied to green bond constituents in the benchmark as defined by the Climate Bond Initiative.

To read the full index methodology, please click here. The characteristics of a passively managed portfolio are maintained.

Henk van der Kolk, Chairman of Pensioenfonds Detailhandel:

“We still have a lot to do, but this is a very positive step: about half of our investment portfolio is now in line with the SDGs.”

Monique Donders, Country Head BlackRock Netherlands:

“We are pleased to help Pensioenfonds Detailhandel reach yet another milestone on their journey to link their entire portfolio to SDGs. More robust sustainability data in the fixed income space is allowing asset owners to access more ambitious sustainable credit asset portfolios. The implementation of this SDG-aligned euro credit mandate is one of the first of its kind anywhere. It speaks to their determination to create ground-breaking solutions in order to respond to the specific sustainability priorities of their members.”

Arne Staal, CEO FTSE Russell:

“By building a customised benchmark that applies specific UN Sustainable Development Goals to the Euro Credit market, FTSE Russell is continuing its long and cutting-edge partnership with Pensioenfonds Detailhandel.

“The FTSE Euro Credit SDG-Aligned Bond Index applies a simple and transparent set of criteria that increases the fund’s exposure to bonds issued by companies and sub sovereign entities scoring highly on issues such as decent working conditions, climate action and sustainable consumption and production.

“FTSE Russell is building the next generation of sustainable fixed income indices that meet diverse investment objectives such as climate risk mitigation, ESG screening or alignment with UN SDGs.”

About Pensioenfonds Detailhandel

With 1.2 million participants and total assets worth EUR 32 billion, Pensioenfonds Detailhandel is one of the larger pension funds in the Netherlands. The pension fund invests its assets in equity, fixed income, real estate and mortgages. For more information please visit: https://www.pensioenfondsdetailhandel.nl/

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to our clients and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.nl

About FTSE Russell

FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $17.9 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.

FTSE Russell is wholly owned by London Stock Exchange Group.

For more information, visit www.ftserussell.com.

For more information or to request an interview please contact:

Pensioenfonds Detailhandel – Tine van Heerikhuize, tine.vanheerikhuize@bureaubpfd.nl, M 0031624887027

BlackRock – Julian van de Wetering, julian.vandewetering@blackrock.com, M 0031615377690

FTSE Russell – Oliver Mann, oliver.mann@lseg.com, M +44 (0) 7583 695 669

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