2018
Annual Responsible Investment Report

Table of contents
Responsible Investment Highlights 2018	
3
Statements	
4
Foreword	
5
Graphic display results 2018	
6
1.	
Introduction	
7
2.	
Investing in Solutions: social and environmental return on top of financial return	
11 
	
Featured: Investing in Sustainable Development Goals	
20
3.	
Active share ownership: making our voice heard	
22 
	
Featured:  IMVB Covenant	
29
4.	
ESG integration: For a better risk-weighted return	
33 
	
Featured: The risks of climate change	
35
5.	
We set limits: exclusion	
41
Outlook	
43
Appendices	
44
Annual Responsible Investment Report 
2
Table of contents
Highlights 2018

PGGM organises
human rights
workshop.
January
March
April
May
June
July
August
September
October
November
December
PGGM joins 
Climate Action 100+
AGM season: PGGM conducts a fruitful 
shareholder dialogue on remuneration 
and good corporate governance. 
GRESB 2018 scores published:
PREF improved again compared to 
last year and outperformed the global 
GRESB average. 
SDI volume calculated. 
Impact Investment 
initiative: the Dutch
water sector.
Purchase of first
sustainability bond.
Dutch pension
fund agreement
on responsible
investment
signed.
PGGM joins the
Investor Leadership
Network (ILN)
Greenpeace 
campaign against
investments in tar
sand oil 
+
+
+
+
+
+
+
+
+
+
FOTO: GREENPEACE
Commission's action plan on
sustainable finance
PGGM, on behalf of the Dutch pension
sector, is involved in Brussels with the
technical details of the European
proposals for a sustainable financing
framework.
+
February
	
Responsible Investment Highlights 2018
Annual Responsible Investment Report 
3
Table of contents

Management Statement 
As the administrator for investment funds and the asset manager for pension 
funds, PGGM Vermogensbeheer B.V. (PGGM) supports its clients in their task 
of providing a stable and high-quality pension for their participants, now and in 
the future. 
PGGM therefore invests its clients' pension money in a responsible way.  
Not just because we see this as our broader societal responsibility or to comply 
with laws and regulations, but because we are convinced that contributing to a 
livable world is part of our primary task.
In this report we account for the activities carried out in the field of 
responsible investment in 2018. Our clients policies and the PGGM’s 
responsible investment framework form the starting point for these activities. 
Within the PGGM investment funds, there is a clear responsible investment 
framework. Specific policy requirements of clients can take shape in internally 
and externally managed mandates. This means that the activities we describe 
in this report are not always applicable to all clients.
Where we refer to clients in this report we mean both the clients participating 
in the PGGM funds and the clients for whom we manage mandates. If we 
state that we invest in a certain portfolio, we always mean that we do so on 
behalf of our clients. 
In compiling the Annual Responsible Investment Report 2018 we have in 
principle adhered to the international reporting principles of the Global 
Reporting Initiative (GRI). The 6 principles of the UN Principles for Responsible 
Investment (PRI) were also used as a reporting guideline.
We have assessed the Annual Responsible Investment Report 2018 and 
declare that, to the best of our knowledge and belief, the information in this 
report presents a true and fair view of reality. The Annual Responsible 
Investment Report 2018 has been assessed and provided with an 
independent assurance report by KPMG Sustainability, an independent 
external auditor. The assurance report is attached in Appendix 4.
Zeist, 29 april 2019
Management PGGM Vermogensbeheer B.V.
Statement of the Supervisory Board
Responsible Investment Report and declare that, to the best of our knowledge 
and belief, the information in this report presents a true and fair view of reality. 
Zeist, 29 April 2019
Supervisory Board of PGGM Vermogensbeheer B.V.
Edwin Velzel, Paul Boomkamp, Roderick Munsters
Eloy 
Lindeijer
Sylvia 
Butzke
Arjen 
Pasma
Bob 
Rädecker
Frank Roeters 
van Lennep
	
Statements
Annual Responsible Investment Report 
4
Table of contents
Highlights 2018

Foreword
As a pension investor, we aim to achieve an optimal return for our 
clients while maintaining a responsible risk profile. Within this core 
task, we pay particular attention to responsible investment based on 
the conviction that this can reduce risks and offers opportunities to 
make a good return with investments that contribute to social and 
environmental solutions. This is especially true in the long period in 
which the money of our clients is entrusted to us.
Responsible investment is also high on the agenda of regulators and 
supervisors, and the pressure from stakeholders and participants to achieve 
sustainable returns is increasing. A confirmation of this development is the 
Dutch pension fund agreement on responsible investment signed in 2018, 
including most of our clients. We have been intensively involved in the drafting 
of the covenant, which sets requirements for the way pension funds and their 
administrators deal with this responsibility. 
On behalf of our clients, we invested € 14.5 billion in solutions for climate, 
healthcare, food security and water scarcity. Both in private markets and in 
the listed domain, we made a number of high-profile investments in 2018  
to finance the energy transition with long-term pension capital. In the US,  
for example, we expanded our interests in solar and wind energy generation 
through an investment in EDF Renewables. 
In 2018, for the first time, we identified how our investments contribute to  
the Sustainable Development Goals (SDGs). At the end of 2017, we invested 
€ 33.8 billion on behalf of our clients in companies and projects that 
contribute to sustainable development. This is more than 15 percent of the 
total assets under management. We call these investments SDI: Sustainable 
Development Investments. The BiO investments are a subset.
In addition to investing for positive impact, we took further steps this year 
towards incorporating ESG risks and opportunities into our investment 
decisions. A great deal of attention was devoted to consistently identifying 
ESG risks in order to be able to improve our management of the resulting 
insights. PGGM became a member of the Sustainable Accounting Standards 
Board (SASB) in 2018. This institute has developed a framework to further 
strengthen this consistency.
The financial impact of climate risks becomes clearer with each passing year. 
California suffered the most devastating forest fires in its history. For an 
investor, transparency is essential for the proper management and pricing of 
such risks. Transparency can also promote energy transition through improved 
market forces. By the end of 2018, more than 500 businesses, insurers, 
banks and institutional investors had explicitly committed themselves to the 
transparency framework of the Taskforce on Climate Related Financial 
Disclosures (TCFD). The first status report of the TCFD, published in 
September 2018, confirms that reporting on climate risks and opportunities 
is improving, although much work remains to be done. PGGM is actively 
working towards further improvements in climate reporting, for example 
through the Investor Leadership Network. 
PGGM plays an active role in various networks and partnerships in order to 
encourage responsible investment and jointly bring about change. In 2018  
we supported a call by IIGCC, urging governments to take concrete measures 
to achieve the objectives of the Paris climate agreement. We also became 
affiliated with the collective engagement initiative Climate Action 100+ 
(CA100+), which is aimed at making the 100 companies with the largest 
contribution to global greenhouse gas emissions more sustainable. These  
are just a few of the developments in 2018. These are an incentive for us to 
continue to work with our clients to achieve a positive impact and the 
transition to a more sustainable world in 2019 and beyond.  
‘We want to achieve good financial returns 
and at the same time have a tangible impact 
on a sustainable world.’
Eloy Lindeijer Chief Investment Management
Annual Responsible Investment Report 
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Table of contents
Highlights 2018

Climate Change, 
  
          Water Scarcity 
               Food Security 
 
          Healthcare                     Human Rights   
               Good  
 
               Stable Financial 
Pollution and  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
               Corporate  
 
  System
Emissions 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
               Governance 
AUM: € 210,8 billion
 
Investing in Solutions 
 
Mandate: at least € 20 billion invested in solutions by 20201 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New in 2018: € 2 billion
€ 14.5  billion
2017 € 13.7 billion
 
 
 
 
 
 
ESG Integration 
Mandate: Relative CO2 footprint of the investment portfolio halved by 2020
 
 
Baseline measurement of the equity portfolio as at 31-12-2014:
 
 
relative CO2 footprint = 339 tonnes of CO2 per million dollars of company turnover.   
 
 
 
 
    
 
 
   
 
Engagement 
Dialogue with 291 companies and 8 market parties:
 
 
27 results achieved among companies
 
 
0 results achieved among market parties
 
Voting 
Voted at 3.877 shareholder meetings.
 
 
43.109 votes cast
 
Legal Proceedings 
€ 5.8 million in investment losses recovered.
 
Exclusions 
Total: 114 companies and government bonds of 13 countries.
As at 31-12-2018 the relative CO2 
footprint = 239 tonnes of CO2 
29,5
ESG
Area of Focus  
 
 
Euro’s invested  
New in 2018 
 
Results  
 
 
 
 
 
Impact over 20173 
 
Climate Change,  
 
€ 7.7 billion 
 
€ 1.3 billion 
 
 
Produced 11.6 million MWh 
 
 
The average electricity use of   
 
Pollution and Emissions  
 
 
 
 
 
 
 
of renewable energy. 
 
 
 
3.5 million households per year. 
 
Water Scarcity  
 
€ 1.2 billion 
 
€ 405 million 
 
 
Saved 73 million m3 of water. 
 
 
The average water consumption of  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.6 million residents in the Netherlands.
 
Food Security  
 
€ 2.5 billion 
 
€ 109 million 
 
 
75,000 tonnes improvement 
 
 
3,100 trucks ﬁlled  
 
 
 
 
 
 
 
 
 
 
 
 
in return 
 
 
 
 
with food.
 
Healthcare 
 
 
€ 3.0 billion 
 
€ 146 million 
 
 
 
 
 
 
 
 
487,000 people provided with access  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
to good healthcare. 
 
 
 
 
 
 
Other 
 
 
 
€ 100 million 
 
 
 
 
 
 
 
 
 
 
 
Impact not measured. 
 
 
 
 
 
Focus area
Instruments
	
Graphic display results 2018
1 Commissioned by our largest client.
2 For all clients, both in funds and in separate mandates. The amounts concern the invested assets and outstanding commitments.
3 The impact has been measured in relation to the investments as at year-end 2017. Of the € 13.7 billion invested in Investments 
in Solutions, the impact of € 9.3 billion in investments has been calculated. This represents 68% of the total Investments in 
Solutions. The impact coverage is not the same for every focus area.
4 On behalf of our largest client.
Annual Responsible Investment Report 
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Table of contents
Highlights 2018

1 	
Introduction
As a manager of investment funds and asset manager for pension funds, we support our clients in fulfilling their 
primary task of providing a sound and stable pension for their participants. We invest the collective pension assets in 
a cost-efficient way. With the assets entrusted to us, we try to find a good mix between achieving returns and limiting 
financial risks. Our clients attach great value to responsible investment. We support them in this and consciously 
take environmental, social and governance (ESG) factors into account in all of our investment decisions. We do this 
on the basis of our belief that financial and social and environmental returns go hand-in-hand and that ESG factors 
affect the risk-return characteristics of investments, most certainly in the long-term. We also want to contribute to a 
liveable, more sustainable world, in which our clients’ participants receive their pensions. 
1.1	 Governance 
As a pension investor, our first priority is our clients and their participants. 
We offer them discerning services and innovative products.5 Based on the 
mandate we receive from our clients, PGGM aims to generate the highest 
possible return and reduce investment risks by managing and investing 
assets in a responsible manner. 
The total assets we under management and advice on behalf of our clients 
amounted to € 210.8 billion at year-end 2018.6 Of these total assets,  
99.8% fell within the scope of the PGGM funds and the internally and 
externally managed client mandates that are subject to the PGGM 
Responsible Investment Implementation Framework (see Appendix 1).7
Each client has its own policy with particular emphases in the area of 
responsible investment. The PGGM funds, in which multiple clients participate, 
have clear implementation guidelines for responsible investment. These 
guidelines are discussed at participant meetings, during which the various 
participants in a PGGM fund have the opportunity to take decisions on 
investment fund-specific subjects together with PGGM and other participants. 
The fund management also can take decisions.
To achieve sound collective decision-making with regard to responsible 
investment, PGGM and its clients can obtain advice and discuss dilemmas 
with an independent advisory council, the Advisory Board Responsible 
Investment (ABRI). The ABRI is composed of experts from both the business 
community and academia who have extensive experience on responsible 
investment issues. The members of ABRI are appointed on the 
recommendation of PGGM's clients and meet once every quarter. In 2018, 
the ABRI provided advice on topics such as our climate vision and climate-
related risks, the exclusion of a number of companies, and cooperation and 
standardisation with regard to impact investments. More information about 
ABRI is available on our website.
‘We want to achieve the required financial return 
and have a positive impact on the world.’
5 In this report we account for our activities as an asset manager. Read more about how we integrate sustainability into our own business operations in the Annual Reports of PGGM N.V. and PGGM Vermogensbeheer B.V..
6 Since 2017, the total assets under management have decreased from € 218 billion to € 210.8 billion. The main reason for this is that PGGM no longer manages all the assets of Stichting Pensioenfonds Huisartsen (SPHU).
7 Some externally managed client mandates are not subject to the Responsible Investment Implementation Framework. In this report we only report on responsible investment activities that are subject to the PGGM Responsible Investment Implementation Framework, 
i.e. over 99.8% of the managed assets.
Annual Responsible Investment Report 
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Table of contents
Highlights 2018

New strategic direction
PGGM N.V. reassessed its strategy in 2018. This had led to 
a greater focus on our contribution to the health and social 
sector. The consequences of this will be further elaborated 
and implemented within Asset Management in 2019. In the 
context of this new strategy, it is important that we continue 
to develop as a responsible and long-term investor so that 
we remain at the forefront of the market in this area. We 
will do this, for example, by responding to important social 
and environmental themes such as the energy transition.
1.2	 Trends and developments in 2018
Sustainability is increasingly important in the financial sector. The subject is 
high on the agenda of national and international regulators and supervisors. 
The way in which companies and investors deal with ESG factors is also the 
subject of public debate. The pressure from stakeholders and participants to 
achieve returns in a sustainable manner is increasing. Moreover, the financial 
sector is expected to account for this by reporting on it in a transparent 
manner. On the one hand, this growing focus on sustainability is the result  
of the realisation that the financial risks associated with issues such as the 
climate are high and must therefore be taken into account by institutional 
investors. On the other hand, there is a noticeable trend towards further 
requirements for transparency and reporting in the field of responsible 
investment and for investors to give more insight into how they deal with  
the subject. 
An important confirmation of this development is the covenant signed in 2018 
for International Socially Responsible Investment (‘IMVB-covenant’) in the 
pension sector. With the IMVB Pension Funds Covenant, the pension sector is 
taking a joint step in the area of responsible investment. Pension funds are 
now expected to have insight into the social and environmental impact of 
companies in their investment portfolio. When these companies cause a 
serious negative impact on society or the environment, it is up to pension 
funds to hold the companies accountable. To this end, pension funds 
cooperate with the government, trade unions and civil society organisations.  
A large part of the sector has committed itself to this. The covenant has been 
signed by 73 pension funds, which together represent € 1,180 billion in 
invested assets, including the following clients of PGGM: Stichting Pensioen­
fonds Zorg en Welzijn (PFZW), Stichting Bedrijfstakpensioenfonds voor het 
Schilders-, Afwerkings- en Glaszetbedrijf (BPF Schilders), Stichting Pensioen­
fonds voor Huisartsen (SPH), Stichting Pensioenfonds voor de Architecten­
bureaus and Stichting Algemeen Pensioenfonds Volo pensioen (Volo). 
The European Commission is also taking the lead in the area of responsible 
investment and increasing transparency by companies and investors. For 
example, the European Occupational Retirement Provision Directive II (IORP II), 
which requires pension funds to take social and environmental risks into 
account in their overall risk management and reporting, came into force.  
The EU Shareholders' Rights Directive (SRD II) will also enter into force. This 
Directive concerns the responsibilities of institutional investors with regard  
to sustainability in their investments. Spearheads are voting policy, attention 
to ESG and remuneration. The above-mentioned European directives are 
reflected in national regulations. In the Netherlands, Eumedion has published 
the Dutch Stewardship Code, which includes elements of IORP II and SRD II.
In addition, the European Union is developing an ambitious plan for 
sustainability in European financial markets.  In May 2018, the European 
Commission published an action plan to make the European financial sector 
more sustainable and to encourage more funding for climate objectives.  
As part of this action plan, improvements are being made to reporting on  
ESG risks and creating a framework for sustainable financing. The framework 
will define which activities can be labelled as ‘green’. In addition, more 
transparency is needed with regard to 'green' financial products.
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Annual Responsible Investment Report 
1. Introduction
Table of contents
Highlights 2018

PGGM is actively involved in the legislative process and, on behalf of the Dutch 
pension sector, is making an substantive contribution to the technical 
implementation of the European proposals in Brussels. When this is added to 
the resolve of DNB to assign climate risks a place in its role as supervisory 
authority, a broad framework emerges. The planned measures affect us and our 
clients in two ways. On the one hand, the requirements for ESG integration will 
have operational effects. In addition, a more transparent and larger range of 
green investment products may possibly and hopefully arise. The precise effects 
cannot be calculated as yet. But it is certain that the trend towards ESG 
integration and green investments will be anchored in (European) legislation and 
directives. At the same time, it is a challenge for our clients to maintain an 
overview in this area of increasing and overlapping legislation and regulations, 
while maintaining their own identity.
1.3 Developments of our clients
The investment convictions and policies of our clients form the basis of our 
implementation. Each client has its own policy with particular emphases in 
the area of responsible investment. Our clients, the pension funds we work 
for, also made considerable progress in 2018, on which they themselves  
have now reported.
	
BFS Schilders rises 9 places in the VBDO rankings
Every year, the Dutch Association of Investors for Sustainable Development 
(VBDO) investigates the extent to which Dutch pension funds invest sustainably. 
Compared to last year, BPF Schilders rose 9 places in these rankings. With a 
score of 3.9 (on a scale of 5), the fund is now in 8th place in the rankings. This 
is a good indication of the steps the pension fund is taking to further integrate 
Responsible Investment. 
In addition, Schilders has signed both the ‘broad' and the 'deep' route of the 
IMVB covenant. This means that the pension fund will integrate the OECD 
guidelines and the UNGPs into its investment portfolio and will also cooperate 
with the various covenant parties in the area of engagement. Finally, BPF 
Schilders has decided to exclude tobacco investments from March 2019.
SPH, Pensioenfonds Architectenbureau and Volo pensioen  
sign the IMVB covenant
Our clients, SHP, Pensioenfonds Architectenbureau and 
Volo have signed the IMVB covenant for pension funds. 
With this, they commit to implement the OECD guidelines 
and UNGPs in their investment portfolio.
	
PFZW renews its entire policy and instruments  
for responsible investment 
In 2017, PFZW expressed the desire to set out in one policy document what it 
wishes to achieve by responsible investment, which instruments will be used 
and the convictions on which this is based. On the basis of this, PGGM and 
PFZW jointly formulated the integrated policy and instruments for responsible 
investment in 2018. This policy document provides a framework for further 
details of responsible investment policy and implementation. This is a 
precondition for a more effective approach with a greater focus on responsible 
investment. This new policy framework is easier to explain to participants and 
stakeholders. The additions and amendments have brought the overarching 
policy into line with the OECD guidelines and the IMVB covenant signed by 
PFZW in 2018. PFZW has signed both the "Broad" and the "Deep" track and 
will actively participate in the learning sessions that are organized around the 
engagement cases.
At the same time, a start was made on a reassessment of responsible 
investment. What are the current initiatives and goals? Which instruments 
contribute most effectively and efficiently to the realisation of these goals?  
The aim of the reassessment is to further increase the consistency and 
effectiveness of the policy and instruments for responsible investment.
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Annual Responsible Investment Report 
1. Introduction
Table of contents
Highlights 2018

1.4 	 Focus areas and instruments
In consultation with clients, PGGM has chosen to focus on a number of areas. 
The choice of focus areas is based on the subjects that are important to our 
clients and their participants. In addition, we expect that these themes will 
affect our clients' investments the most. However, the focus applied means 
that there are also areas on which PGGM does not specifically focus.  
We believe that a clear focus contributes to increasing the impact that we  
can achieve through our responsible investment activities. By concentrating 
the resources at our disposal, we want to be able to contribute as much as 
possible to the chosen focus areas.
Specifically, PGGM wants to reduce the negative aspects of the footprint 
through its investments for clients and make a positive contribution to the 
focus areas of Climate change, pollution and emissions, Water scarcity,  
Food security, Healthcare, the Safeguarding of human rights, Good corporate 
governance and a Stable financial system at the service of the real economy.8
 
We use a number of instruments for implementing responsible investments: 
exclusion of companies and government bonds, ESG integration into the 
screening and monitoring of companies and external managers, engagement, 
voting, legal proceedings and Investments in Solutions for social and 
environmental issues. In the following sections, we identify the contribution 
we have made on behalf of our clients for each instrument.
 
8 In this report we have not included examples of activities that are linked to the focus area "Stable financial system" because there were no material developments.
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Annual Responsible Investment Report 
1. Introduction
Table of contents
Highlights 2018

2. 	 Investing in Solutions: social and environmental 
return on top of financial return
The long-term orientation and the size of the assets invested by PGGM create an opportunity to use the driving power 
of money in the interests of a more liveable and sustainable world. PGGM implements this by investing, in various 
asset classes, in scalable solutions for (future) social and environmental issues which matter to our clients and their 
participants or which may have a material impact on the investment portfolio.
2.1 	 New investments in 2018
There are good reasons to invest in companies that make a positive 
contribution to society and the environment. First of all, it is precisely in the 
long term for which capital is built up in the pension sector, that global threats 
such as climate change and food shortages affect society. This means that 
participants are highly likely to experience the negative effects, as mentioned, 
at first hand. Where possible, we want to invest in solutions for such 
problems. We also notice that regulators are encouraging more responsible 
investment and that they require pension fund managers to be 'in control', 
including with regard to such systemic risks and structural trends. 
Since 2014, PGGM has therefore been investing on behalf of its clients in 
solutions for a number of the world's greatest challenges: climate change and 
environmental pollution, water scarcity, food security and healthcare. These 
targeted investments - which we call Investing in Solutions (BiO) - not only 
contribute financially to the returns achieved for our clients, but also create 
added social and environmental value. Through these investments, our clients 
contribute to the realisation of several Sustainable Development Goals (SDGs). 
The assignment we are implementing for our largest client, PFZW, is to  
invest at least € 20 billion in solutions by 2020. At the end of 2018, a total  
of € 14.5 billion had been invested in solutions. 
We invest in solutions on the basis of a focused listed equities mandate  
that we refer to as Investments in Solutions via liquid Equities (BOA). The total 
assets we have invested in BOA: € 2.8 billion. In addition, we invest in solutions 
via other investment categories, such as real estate and infrastructure.
‘We cannot trade financial return for social and 
environmental impact. We want both, and we think  
we can have both.’ 
Piet Klop Senior Advisor Responsible Investment
Annual Responsible Investment Report 
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Table of contents
Highlights 2018

Investments in solutions 2018
PGGM invests in
Schiphol green bond
€ 10 million
First social bond
and sustainability
bond purchased
Eisai
Developing
Alzheimer
medication 
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+
+
+
+
EDF
50% stake in 
Renewables
SUEZ
PGGM purchased
20% of shares
Redevco
€ 550 million in commercial real estate
+
12
Annual Responsible Investment Report 
2. Investing in Solutions
Table of contents
Highlights 2018

Finding Investments in Solutions: a challenge.
In the world around us, there are social and environmental challenges that 
require funding. Perhaps the most important one is the energy transition.  
To stop climate change, a large-scale energy transition is necessary.  
Major investments are needed to phase out fossil fuels and make energy 
consumption more sustainable, efficient and financially attractive. Worldwide, 
an amount of $ 1,000 billion would be needed, also called the 'clean trillion'. 
Capital and further research into energy innovation are also needed to achieve 
this transition. PGGM makes an active contribution to this, on behalf of clients, 
by looking for investments which can play a role in this. For example, in 2018 
we investigated opportunities to invest in new technologies for storing and 
generating energy using hydrogen. 
It is challenging to find the large investments that are necessary. Many 
innovations are still in their infancy and do not carry enough weight and have 
too many development risks to invest in. It is therefore uncertain whether there 
will be sufficient investment opportunities in the coming period to achieve the 
target of € 20 billion in 2020. 
In order to be interesting to our clients, Investments in Solutions are required  
to contribute adequately to finanacial returns as well as to positive impact. 
When we come across such investment opportunities, then we want to invest  
in them. A concrete example of this is the acquisition of a long-term interest in 
energy company Eneco through a joint venture with Shell, which was announced 
in early 2019.
We look for ways to tap into such investment opportunities in the Netherlands 
through cooperation with other investors and the government. For example, we 
did this through the Dutch Investment Institution (NLII). NLII was discontinued 
in 2018. There were no additional financing issues in which it could play  
a significant role.  In 2018, we informed Invest-NL of the available options  
to contribute to the Dutch energy transition together with the government, 
banks and other pension funds. 
PGGM is also looking for ways to effect smaller transactions and to aggregate 
investments into investable propositions. Read about this on page 15.
The majority of BiO investments contribute to the focus area of Climate 
change, pollution and emissions. The allocation to this focus area has 
increased compared to the allocation to other focus areas, mainly because  
of the increased purchase of green bonds. Read more about green bonds  
on the next page. During 2018  € 2 billion was invested in solutions. 
Page 12 shows examples of these investments. Visit our website for a 
complete overview.
Figure 1
Total euros invested per focus area (billion)
Climate Change, Pollution 
and Emissions 
Water Scarcity 
Food Security
Healthcare
Other
€ 3.0 mld
€ 2.5 mld
€ 1.2 mld
€ 7.7 mld
€ 0.1 mld
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Annual Responsible Investment Report 
2. Investing in Solutions
Table of contents
Highlights 2018

Perspective of the investor - Wilfried Bolt on the poster child 
of fixed income.  
In 2018, green bonds, the poster child of fixed income, lost part of the 
momentum it had built up in recent years. The spectacular growth of green 
bonds seems to be declining although the diversity of green bonds has 
increased. Senior Investment Manager Fixed Income, Wilfried Bolt, explains:
“Different types of bonds are increasingly issued in a green format. For example, 
in 2018 the Loan Market Association published the Green Loan Principles, 
allowing the private loan market to take a more sustainable course. Social bonds 
and sustainability bonds took over a part of the momentum of green bonds.  
These new categories of green bonds enable us to make a targeted contribution  
to specific impact themes. Social bond investments contribute positively to 
addressing social issues such as affordable housing, food security or access to 
essential necessities of life. Sustainability bonds are a mix of green bonds and 
social bonds because the proceeds are spent partly on climate objectives and 
partly on social objectives.  
Another reason why growth is stalling could be that many potential issuers are 
waiting for the European Commission's Sustainable Action Plan. One of the 
components of this plan is the establishment of a European green bond standard. 
As well as a taxonomy that indicates which sectors or projects are and are not 
considered sustainable. PGGM, on behalf of the Dutch pension sector, is a 
member of the technical working group to provide a framework for this. The results 
are expected to be presented at the end of 2019.” 
PGGM is also involved in market initiatives to encourage CO2 intensive sectors  
to issue green bonds, provided that this takes place in line with a credible and 
sustainable climate strategy. “We think it is particularly important that these 
polluting companies move towards a more sustainable climate policy, because  
this is where the greatest gains can be made.”
“Since developments are going fast, we held a theme meeting about green bonds 
for our clients in September to keep them informed. At this meeting, the Climate 
Bonds Initiative, Tennet and ourselves discussed the above developments, 
opportunities and risks of green bonds for both the issuer and investor in an 
interactive setting. An important point to keep in mind when buying a green bond 
is whether this green bond actually changes something in the world. If a company 
or government issues a green bond to finance part of the balance sheet, which 
they previously financed with a normal bond, without changing their behaviour,  
it is doubtful whether a green bond contributes to any social or environmental 
return. However, when the issuing authority does start to operate, report or 
influence other stakeholders in a more sustainable way, this contributes to both 
financial return as to social and environmental return.”
In 2018, PGGM purchased various green bonds for both its interest and loan 
portfolios. These green bonds are part of the 'Investments in Solutions' (BiO) 
programme. “We have invested in green bonds in France and Belgium, among 
other countries. Governments play a special role in the climate debate. On the  
one hand, they have the means to encourage behaviour in the real economy 
through policies, subsidies and taxes. On the other hand, by issuing green bonds 
themselves, they can play a pioneering role in the private financial sector. The 
largest expense underlying the French green bond is a tax refund to homeowners 
for energy saving measures.” France has calculated that the € 3.2 billion 
restitution to more than 1.2 million households in 2016 and 2017, will lead to  
2.9 million tonnes less CO2 emissions and € 2.2 billion in cost savings for these 
households in the period 2015 to 2050.  
“We do not accept lower financial return for these bonds than traditional bonds. 
Some Green Bonds have therefore been sold if the valuation is no longer in line 
with the character of the risk/return. In 2018, PGGM published its green and 
social bond framework online, in which we explain our view of green bond 
investments. We follow the ICMA green bond principles, but we also pay extra 
attention to the ESG policy of the issuer and look at whether the proceeds will  
be spent on our focus areas of climate change, water scarcity, food security or 
healthcare. We have avoided green bonds from issuers whose ESG policy is not  
in line with the objectives of the green bond.” 
‘Different types of bonds are increasingly 
issued in a green format.’
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Perspective of the Investor - Willem Jan Brinkman  
on the new initiative of private equity.  
In 2019, the private equity team will start a new initiative to find investment 
opportunities within the BiO themes of climate change, water scarcity, food 
security and healthcare. Willem Jan Brinkman explains:
PGGM has built up a large global portfolio of private equity investments for its 
clients. At the end of 2018, these amounted to over € 12.5 billion. An important 
component of the investment strategy is the ambition to invest directly in portfolio 
companies, so-called co-investments, in addition to investing in funds, together 
with the fund manager.
“Partly due to the growth of the portfolio, we see that individual investments are 
increasing. This is in line with developments in the market, where we see an 
increase in the number and size of large funds. Along with these developments, 
however, we have also seen that it is becoming increasingly difficult to free up 
capacity to look at smaller funds and co-investments.
In the area of investments in social and environmental solutions, this is precisely 
the problem: funds that focus on a particular theme, such as food supply or 
healthcare, are often smaller than generalist funds without a theme or sector 
focus. Many fund managers that have a particular sustainability focus are also 
relatively new. This means that an extra effort and therefore extra capacity is 
required in order to pay serious attention to this part of the investment universe. 
From 2019, part of the private equity team will therefore focus entirely on 
investments in these smaller thematic funds.
Within the global universe of over 12,000 fund managers, we are looking for 
possible investments in funds that focus on climate change, water scarcity,  
food security and healthcare. The aim is to invest a substantial amount in funds 
and co-investments over the next 3-5 years.”
‘Through co-investments we want to be 
able to invest directly in companies that 
make a positive contribution to solving 
social problems.’
“This is quite a challenge. In terms of risk and return requirements, the 
investments are placed on the same level as all other private equity investments, 
while we are selecting from a smaller universe. It is also important that fund 
managers comply with our standards in the field of impact measurement. Because 
these fund managers are often relatively small and/or new, we spend a lot of time 
researching and getting to know these managers. Through co-investments we want 
to be able to invest directly in companies that make a positive contribution to 
solving social problems. As far as we are concerned, this is the best way to put 
pension money directly to work in society and to achieve a good financial return.” 
2.2.	 The social and environmental impact of investments 
Asset managers obviously know exactly what the financial performance of 
their investments is. What is still lacking is solid, consistent and reliable data 
that provides insight into the social and environmental impact of these 
investments. In the world of responsible investment, the focus is increasingly 
shifting towards these results. In addition to the financial return, what is the 
actual social and/or environmental impact of responsible investment? 
It is not enough to state that a certain asset is invested in something for 
which a positive social and/or environmental contribution is expected. This 
would only measure good intentions, whereas the actual goal is to determine 
whether there is actually a positive impact in terms of measurable9 
improvement. Ultimately, it is this element, measurability, that makes an 
investment an impact investment. It is essential to calculate this impact, both 
for comprehensible communication of the positive impact of the pension 
investments and for the credibility of investing with impact. By calculating the 
social and environmental impact, sustainability can also be taken into account 
and weighed in decision-making. 
9 Our criterion is that companies must measure the impact, or be prepared to do so in the future. In this way we want to encourage the industry to measure and report impact.
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Focus area
Impact over 2017 is equivalent to
The average electricity use of
3.5 million households per year. 
The total CO2 emissions avoided is equivalent to the 
average CO2 emissions of more than 215 thousand
households per year.
Impact over 2017 is equivalent to
The average water consumption of 1.6 million
residents in the Netherlands.
The number of litres of puriﬁed water is 
equivalent to the average amount of water 
consumed by taking 8 billion showers.
Impact over 2017 is equivalent to
3,100 trucks ﬁlled with food.
Total
€ 3 billion
New in 2018: 
€ 146 million
Invested in (non-excl.) 
• Medicines  
 
 
 
• Treatments 
 
 
 
• Care homes
Impact over 2017 is equivalent to
487,000 people throughout the world had 
access to healthcare, or beneﬁted from an 
improved quality of care.
7,100 hospital treatments avoided.
Investing in 
climate solutions
Impact of investing in solutions
Investing in 
water solutions
Investing in
food solutions
Investing in
health solutions 
CO2
 
  
 
 
 
Focus area
Focus area
Focus area
Total
€ 7.7 billion
New in 2018: 
€ 1.3 billion
Invested in (non-excl.) 
• Renewable energy
• CO2 efﬁcient
   buildings and
   production
 
Results (non-excl.)
Produced 11.6 million MWh
of renewable energy. 
Avoided 4.9 million
tonnes of CO2.
Total
€ 1.2 billion
New in 2018: 
€  405 million
Results (non-excl.)
Saved 75 million m3 of water.
Treated 378 million m3 of 
wastewater.
Total
€ 2.5 billion
New in 2018: 
€ 109 million
Invested in (non-excl.) 
• Efﬁcient production
• Solutions to combat
   food wastage
 
Results (non-excl.)
75,000 tonnes improvement in return.
Invested in (non-excl.) 
• Water puriﬁcation
• Water conservation
• Drinking water
   production
 
 
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We therefore specifically look for investments that make a substantial and 
measurable  contribution and report annually on the positive impact of these 
investments.10 In addition to the financial return, we calculate the impact of 
these investments. 
We use impact data reported by companies and impact data based on impact 
models for this purpose. In this calculation, we only allocate to our clients 
that part of the total impact that corresponds to their share in the company or 
the fund. For a more detailed explanation of how the impact is calculated visit 
our website. See page 16 for an overview of the impact calculated over 2017.  
2.3 	
Cooperation with academics for better impact calculations 
Measuring tangible impact (in absolute units such as kilos of CO2 emissions 
avoided or numbers of people with access to good healthcare) is difficult. 
Mapping out the social and environmental added value resulting from 
responsible investment is still in its infancy. There are plenty of challenges: 
very few companies have a good idea of their social and environmental 
impact, let alone how they can quantify and report on it. This means that very 
little impact data is available. For this reason, PGGM works closely with 
academics and other partners to develop methods for this. 
Together with the external portfolio manager of BOA, UBS Asset Management, 
City University of New York, Harvard University, and the University of 
Wageningen, we have developed an impact assessment model that converts 
company revenue from solutions into absolute impact. For the time being, we 
only measure the impact of products and services. 
The cooperation with the University of Wageningen focuses on impact 
modelling in the area of agricultural productivity and food waste. With the 
world population being expected to approach 9 billion by 2030, it is clear that 
providing food is a major challenge, especially if we take into account food 
quality, access to food and resource productivity.
Calculations are made to determine the increase in production through 
fertiliser and better seed, and the avoidance of waste through improved 
storage, transport and packaging of food. Important questions that arise here 
are the opposite effects on climate and water quality. Fertilizer production is 
highly carbon-intensive and excessive use leads to algae growth in surface 
water and better packaging materials often means more plastic. It is therefore 
important to look at the problem from a perspective that encompasses the 
entire chain.
The impact models we developed were presented to a number of companies 
in August 2018. They were very interested in our approach towards converting 
company revenue from solutions into absolute impact. It also became clear 
that further refinement of the models is needed based on more disaggregated 
sales figures of the solutions produced (where, to whom?). This is being 
addressed through intensive engagement with the individual companies. 
Together we are looking for a way to gain the necessary insight. 
‘We are happy to lead the charge and hope  
to demonstrate that mainstream investors 
can deliver both market-rate returns and a 
measurable impact.’  
 
Piet Klop Senior Advisor esponsible Investment
2.4 	 Impact Management Project
In terms of impact, progress has also been made on the standardisation front. 
During 2018, PGGM contributed to the Impact Management Project (IMP),  
to which more than a thousand funds, managers and advisers are affiliated. 
The purpose of this partnership is to reach agreement on how we define impact 
goals and results, and how we measure and manage impact. In this way, PGGM 
helps its clients to communicate more accurately about the difference their 
investments make in the real economy and what our role in the process was. 
Together with the IMP, we have identified and listed the entire portfolio in terms 
of social and environmental impact. Read the results of this here.
10 For the calculation of the social and environmental impact of investments, we depend on the impact data reported by companies. As a result, our impact calculation lags one year behind the reference date of the portfolio.
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Additionality and impact  
As a responsible investor, it is important to identify and list the impact of our 
investments. But when can we ‘claim’ that we have had a certain impact? 
Have we as investors really had a positive or negative effect on the world, or 
would the same have happened without our financial contribution? As a large 
institutional investor, this is a relevant question. The Impact Management 
Project offers a useful framework for this. It distinguishes between the 
impact of the company and the impact of the capital provider (the investor). 
It also defines different degrees of impact. The hope is that this will bring 
clarity about what companies and investors routinely claim as their 'impact'.  
The impact of the lender is certainly not ‘additional’ on secondary markets  
for shares and bonds: without our investment the companies would probably 
provide the same products and services (with corresponding impact). In the 
primary markets for infrastructure and private equity, however, as investors  
we can be the decisive factor for the success of a project or company. The 
difference between 'impact alignment' on secondary markets and 'real impact' on 
primary markets is also something we try to make clear in our communications. 
Impact investment...or not?
Although we strive for a positive, preferably additional social and 
environmental impact with our investments in solutions, both our clients and 
ourselves as asset manager have the primary task of ensuring a good pension 
and therefore a good financial return at an acceptable risk. We cannot make 
concessions to the financial results to be achieved for participants and 
therefore cannot maximise positive social and environmental impact at the 
expense of financial return. We therefore want to have a positive social and 
environmental impact while maintaining market-rate returns.
A great social or environmental need is not necessarily a good investment 
opportunity. At present, therefore, efforts to identify and list the impact of our 
clients' investments do not affect our strategic asset allocation: we do not 
focus on the scope of specific societal results. Measuring the tangible social 
and environmental impact does, however, enable us to clarify where we have a 
11 Global Water Intelligence database
positive impact and where data is lacking to evaluate it. By doing this, we hope 
that more investors will see that one thing does not have to rule out the other: 
we can achieve a market-rate return with impact. 
We can also send an important signal to the market when we shift part of the 
capital to companies with an explicit social and/or environmental contribution. 
With this we hope to set a good example which others will follow. In addition, 
what most ‘real’ impact investors lack is what we (the pension sector) do have: 
scale. 
2.5 	 Impact Investment Initiative: the Dutch water sector
More than $ 500 billion would be needed annually to achieve water security 
and flood safety for all.11 Approximately one third of this enormous capital 
requirement is covered. Because government budgets and concessional 
funding by development banks are inadequate, a large part of the capital 
required will need to be raised by private parties.
This provides opportunities for the pension sector. In particular, there appear 
to be opportunities for pension capital to work together with technology 
companies, specialised construction companies and operating companies  
in order to conclude large projects and/or long-term concessions in the field 
of drinking water supply, wastewater treatment and industrial water. 
Unfortunately, however, the Dutch pension sector and the Dutch water sector 
operate in isolation from each other instead of reinforcing each other. For this 
reason, PGGM and the Financieel Dagblad organised the 'Impact Investment 
Initiative - the Dutch Water Sector' in January 2018, in order to arrive at more 
investable propositions in the area of water supply and water security. Read 
more about our position with regard to water in the article ‘Water als geld’ 
door Chris Limbach & Piet Klop (pdf).   
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The impact of medicinal products
PGGM has carried out two projects to measure the 'social impact' of new 
medicinal products produced by two listed medical producers, AstraZeneca and 
Novartis.12 Both pharmaceutical companies are included in the BOA portfolio,  
a specially designed impact portfolio of listed companies, aimed at achieving 
financial return in line with the market. For the water, energy and food sectors, 
the impact is expressed in terms of tonnes of CO2 avoided, cubic metres of 
clean water produced, megawatts of renewable energy produced and tonnes  
of food produced, respectively. We try to measure this through standards that 
we develop together with other parties.
Health impact is more complicated to determine. How do you determine whether 
a pension euro invested in listed pharmaceutical companies, currently a quarter 
of the total impact mandate, has a positive influence? And which aspects do you 
look at specifically? 
Because this is still an unexplored area, we asked the two pharmaceutical 
companies whether they could each provide insight into the impact of one of their 
medicinal products in the Netherlands. At AstraZeneca, this concerned the impact 
of the new drug Lynparza on the treatment of ovarian cancer in patients with 
mutation in a specific gene. This is a serious form of cancer that is diagnosed  
in 1,350 women in the Netherlands every year and from which more than 60% 
eventually die. The impact study shows that Lynparza extends the period in which 
the cancer does not develop further after chemotherapy by 14 months. In 
addition, the use of Lynparza leads to a reduction in total treatment costs of 
approximately 18% in the first year in any case, compared to the situation in 
which another medicine is used as a maintenance treatment. 
At Novartis this concerned the medicinal product Entresto, which is prescribed  
for people with chronic heart failure. The impact calculations show that the risk  
of hospitalisation decreases by 21% when this new medicinal product is used.  
On average patients live five months longer, with a total length of survival of 
approximately five years. This medicinal product does not lead to lower costs - 
Entresto is more expensive than the common drug against which it competes. 
However, the extra costs of Entresto result in a health gain at a price that is well 
below the current standard.
In the future we want to measure the impact of more medicinal products, in  
more countries. It is the first time that an institutional investor has asked large 
pharmaceutical concerns to measure this kind of impact in this way. The results 
of the two companies have been validated by an independent party, the institute 
for Medical Technology Assessment (iMTA), which is part of Erasmus University 
Rotterdam. 
This kills two birds with one stone: pharmaceutical companies, which are 
currently scrutinised very critically when it comes to their pricing policy, gain 
experience in formulating their social contribution. And PGGM needs the data  
to illustrate its basic assumption: financial and social returns can go hand  
in hand. More insight into this impact across the entire product range of 
pharmaceutical companies is needed to make pension investments more  
than making 'money with money'.
12 Novartis was marked as a Global Compact Violator in early 2018 due to allegations of bribery. This raised questions: can a company be a Global Compact Violator and remain part of the BOA impact portfolio at the same time? After extensive internal discussions  
and research, we decided not to remove the company from the BOA universe and therefore not to remove it from the BOA portfolio. The decisive factor was that we were already invested in the company at the time Novartis was designated by Sustainalytics as a Global 
Compact Violator, and we were therefore in a good position to address the problem in question - alleged bribery - through engagement. We are now trying to exert our influence directly and bring about a positive change in the governance of the company. We are in close 
consultation with Novartis and are monitoring the improvements. For more information see page 27.
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Featured: Investing in Sustainable Development Goals
At the end of 2017, on behalf of our clients, we had € 33.8 billion invested in 
companies and projects that contribute to sustainable development. This was 
more than 15 percent of the total assets under management at the end of 2017. 
We call these investments SDI: Sustainable Development Investments. This term 
is derived from the United Nations’ term SDGs, or Sustainable Development Goals.
The financial sector has embraced the SDGs: more and more institutions are 
reporting on their contributions to the SDGs. But when does a company, product 
or service contribute to an SDG? As yet, no standard has been formulated for 
this. Standards facilitate verifiability and, consequently, reliability. In addition,  
a standard ensures that the contributions of financial institutions to sustainable 
development are comparable. Finally, standards allow companies to better 
understand and act on investors' expectations. For these reasons, in 2017  
APG and PGGM jointly developed a framework for investments that contribute  
to sustainable development: Sustainable Development Investments (SDI). 
The SDGs were taken as the starting point for this framework, because  
they form a common language for talking about sustainable development.  
The framework consists of a definition of Sustainable Development Investments 
and a taxonomy. Taxonomy is a classification system of investable products and 
services for sustainable development per SDG. The definition states that SDIs 
are investments in companies or projects that generate a positive impact on 
the environment and society through their products and services, or because 
they are recognised as leaders in sustainable development through their 
business operations. At the same time, these investments meet the risk  
return requirements. 
SDI: results of the first measurement
In 2018, we identified and listed the portfolio's contribution to sustainable 
development goals for the first time.13 At the end of 2017, we had invested  
€ 33.8 billion on behalf of our clients in companies and projects that contribute 
to sustainable development. This was 15 percent of the total assets under 
management at the end of 2017. By providing this insight, we offer our clients 
the opportunity to determine to what extent they want to and are able to 
increase their contribution to the development goals. Moreover, this makes the 
degree of 'SDG alignment' of the portfolio more comparable with that of other 
financial institutions. However, the results are not yet entirely comparable  
with our peers who also use SDI taxonomy: the taxonomy still leaves too much 
room for interpretation. PGGM meets regularly with its Dutch peers to further 
harmonise the classification methods. The results per SDG are shown below 
(invested capital per SDG). For each SDG, an example is given of a company or 
project that contributes to achieving this development goal. Click on the plus 
sign to see the examples.  
Invested
capital
per SDG
13  Invested capital per SDG SDI calculation is performed on 98% of the portfolio.
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14 As the availability of sustainability data often lags behind that of financial data, both in quantity and quality, our SDI calculation is hedged by some uncertainty.
15 Because of these and other dilemmas and challenges, the SDI volume we report for 2018 is not definitive. This means that the volume may change significantly in the coming years, for example due to technological developments and improvements in the availability 
of data. Or by a better method of analysis, on which we will continue to work in the coming years.
Continuation  Featured: Investing in Sustainable Development Goals
The distinction between BiO and SDI
As explained earlier in this report, PGGM invests in solutions for four social and 
environmental themes: these are the so-called BiOs. So why are we now looking 
at SDIs as well as BiOs? The 4 BiO themes correspond to 
. BiO is a subset of SDI. PGGM's clients also want to know how they 
contribute to the other SDGs. In this way, future contributions to multiple or 
different social and environmental themes can optionally be managed. PGGM 
has therefore also identified and listed the contribution to these other SDGs. 
We call the total package SDI.
  
Figure 2
 AUM, SDI, BiO ratio
There are more distinguishing features between BiO and SDI: for BiO 
investments we first measure the impact generated by the company or project, 
i.e.: how much renewable energy is generated, how many people are helped 
with medicinal products, etc. We do not do this for SDIs. Here we only look at 
whether the investment is in line with the SDGs. In addition, the SDI theme is 
broader than the BiO theme: for example, for the BiO theme of healthcare we only 
look at the 20 most deadly diseases, while for SDI we consider the treatment 
of many more diseases as contributing to the development goal for health. 
Dilemmas and challenges of SDI classification
We faced a number of dilemmas and challenges when identifying and listing  
the contribution of the investments to the SDGs. The biggest challenge was  
the lack of data. Many companies do not yet report on how they contribute  
to sustainable development. Few companies report on the sales percentages  
of their sustainable products and services. We use these figures to determine 
what percentage of our investment in the company can be counted as SDI.14  
Another major challenge is to compare positive and negative contributions:  
a company can contribute to one SDG through its products and services,  
but damage another SDG at the same time. For example, artificial fertiliser 
contributes to food security (SDG2) because it ensures more efficient food 
production. But at the same time, the production and use of artificial fertilisers 
cause a lot of CO2 emissions and are therefore a negative contribution to the 
climate (SDG7). What carries more weight? In this first SDI baseline 
measurement, we have not always included the negative impact in the 
decisions. This is our aim for future SDI measurements.
It is often difficult for investors to know the context in which a company 
operates, the chain and the end user. Although we have taken serious 
controversy into account in the SDI classification, these do not expose all 
wrongdoing. A final challenge worth mentioning is that, fortunately, the world  
of sustainable solutions develops quickly. Through innovation and regulation, 
products and services that we considered sustainable yesterday can be 
replaced by a better alternative today. Or products that are unknown today  
can be on the market as a sustainable solution tomorrow.15 
 
 
BiO
SDI
AUM
€ 14.5 miljard
€ 33.8 miljard 
€ 210.8 miljard
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3. 	 Active ownership: making our voice heard	
As an investor with a long-term horizon, PGGM holds shares in approximately 3,500 listed companies. We actively 
use our influence as a shareholder to realise improvements in the area of ESG in order to contribute to the quality, 
sustainability and continuity of companies and markets in this way. We do this based on the vision that this 
ultimately contributes to a better financial and social and environmental return on the investments for our clients. 
3.1	 Engagement with companies and market parties
We hold companies and market parties to account for their policy and 
activities on behalf of our clients. Through this dialogue, we attempt to 
achieve ESG-related improvements. Shareholder engagement requires 
stamina and high-quality knowledge in order to be able to conduct a fruitful 
dialogue with corporate management and to exert maximum influence. PGGM 
has invested in this for years, and has achieved results. We believe, and we 
are not alone in this, that companies benefit from critical, active shareholders 
who keep companies up to the mark and encourage them to focus more on 
sustainability. 
Due to the large number of companies in which PGGM invests, we are 
required to make choices about the companies with which we can conduct an 
active dialogue. There are obviously too many companies to be able to talk to 
them all effectively. We strive for focus in our engagement activities. To this 
end, in consultation with our clients, we have drawn up engagement 
programmes that focus on components within the themes: Climate change, 
pollution and emissions, Water scarcity, Healthcare, Human rights safeguards, 
Good corporate governance and a Stable financial system. 
We make a selection based on a number of criteria. The first selection 
criterion is the relevance for our clients and their participants. The second 
criterion is the role that PGGM can play as an investor. Do we have the 
knowledge? We also look at whether the engagement can actually have an 
impact - is the company open to discussion? A larger shareholder interest 
means more control and therefore more opportunity to influence a company. 
The last criterion concerns the expected contribution to long-term value 
creation for the company, the shareholders and society at large. Based on 
these criteria, engagement projects are defined based on data and research 
from external suppliers.  For each engagement project, we set goals and 
timelines in advance. We measure progress on a quarterly basis.
‘As an institutional investor, we believe we have a 
responsibility to help companies move in the right 
direction. As an asset manager we want to show a 
sustainable and explainable return and exert positive 
social and environmental influence.’
Sevinc Acar Senior Investment Manager Fixed Income 
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16 At the start of 2019, GES was acquired by Sustainalytics.
Minimum shareholding requirements
Being an active ownership isn't optional: minimum requirements are increasingly 
being imposed on institutional investors worldwide in both legislation and 
regulations. For PGGM and its clients these minimum requirements are laid 
down in the applicable Dutch legislation and regulations and in the Dutch 
corporate governance code. We aim to set an example to other investors, 
including institutional investors, through our behaviour as an active 
shareholder in all the markets in which we invest.
In implementing active share ownership, PGGM adheres to the standards and 
principles of various organisations, such as:  
•	the active share ownership principle of the Principles for Responsible 
	 Investment (PRI) 
•	the Eumedion Best Practices for engaged shareholders 
•	the principles of the UN Global Compact 
•	the Guidelines for Multinational Enterprises of the Organisation for Economic 
Cooperation and Development (OECD) and the United Nations Guiding 
Principles on Business and Human Rights (UNGP)
Together we stand stronger
Dialogue with companies can be a powerful means of bringing about concrete 
changes in companies. Especially if we do this together with others. PGGM 
aims to enter into coalitions with other institutional investors and market 
parties in order to engage in dialogue with listed companies. This will increase 
our impact because the total share in the company is larger. 
For example, in 2018 PGGM worked with a group of large institutional 
investors from the Netherlands, Great Britain and the United States with a 
combined invested capital of $ 2.5 billion. Within this coalition, we hold 
companies accountable for the composition of the board. We ask companies 
to move towards more diversity in terms of gender, age, skills, experience and 
background. In 2018, PGGM also brought a coalition of large European and 
American institutional investors together to enter into joint discussions with 
companies in portfolios that awarded the most excessive remuneration.
Results in 2018
Dialogue alone is not enough; it is also important to systematically monitor the 
results. Together with Global Engagement Services (GES)16, our engagement 
service provider to whom we have outsourced part of our engagement activities, 
we have been able to recorde 27 cases of the 291 companies with which we 
engaged, in which the policies and / or working methods of a company changed 
after active engagement. Often (especially in the case of media attention), 
several stakeholders (such as NGOs and other investors) influence the behaviour 
of a company. These changes cannot be attributed solely to our efforts. 
3
Engagement Activities with
Companies by Region in 2018:
Engagement Activities with
Companies by focus area
in 2018:
Asia
Europe (excl. Netherlands)
Netherlands
North America
Rest of the world
Corporate governance
Climate change,
pollution & emissions
Healthcare
Safeguarding
human rights
Water scarcity
Totaal
314
84
57
157
13
3
84
57
157
13
Engagement activities
with market parties by
Region in 2018:
Engagement activities with
market parties by focus area
in 2018:
Asia
Europe (excl. Netherlands)
Netherlands
North America
Rest of the world
Health
Food
5
1
7
1
1
1
Corporate governance
Climate change,
pollution & emissions
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Company engagement in 2018
In our dialogue with companies, we focus on companies where we discern 
ESG opportunities and risks. This can vary from setting up a strategy on 
access to healthcare in developing countries to implementing sound human 
rights policies. The focus is on companies that have an impact in the region, 
sector or chain.
	
Commitment to good corporate governance 
In the markets in which we invest on behalf of our clients, we monitor 
whether companies are managed efficiently and responsibly and whether they 
account for their policies. We engage in dialogue with companies when we 
see that improvements are possible or necessary in corporate governance. 
For example, in 2018, we spoke to various companies about their 
remuneration policies. We also spoke to ING. 
 
In March 2018, ING announced its intention to increase the CEO's salary by 
50%. Following this announcement, PGGM publicly expressed its opposition.  
We expect ING, as a systemically important bank, to take its societal role into 
account. ING has already withdrawn its proposal to increase the remuneration 
of the CEO. At the AGM in April, together with other investors, we reiterated our 
concern and insisted that the bank set up an extensive consultation on the 
remuneration policy. In addition, the lack of diversity at the highest level of the 
bank was discussed. ING has committed to involving shareholders in a broad 
consultation.
	
Engagement with largest CO2 emitters 
In 2018, the collective engagement initiative Climate Action 100+ (CA100+) 
was launched, which is aimed at making the 100 companies with the largest 
contribution to global greenhouse gas emissions more sustainable. This 
concerns both fossil fuel suppliers (upstream) and users (downstream),  
such as heavy industry and car producers. In mid-2018, the focus area was 
extended to companies that can make an important contribution to solving 
climate problems or which could be hit hard by the consequences of climate 
change (without being at fault). Since its inception, more than 300 investors 
have joined the initiative.
Within CA100+, PGGM focuses on a few large energy and utility companies and 
on companies with a relatively high CO2 intensity. The aim of our engagement 
activities: resilience and preferably playing a leading role in the energy 
transition and disclosure according to the framework of the TCFD. The first 
successes of CA100+ became visible in 2018. For example, in a joint 
statement with investors, Shell announced that the remuneration of its top 
management would be partly linked to the achievement of climate targets.  
Shell was one of the first energy companies to publish a climate report under 
the TCFD framework and was one of the driving forces behind a report on 
disclosure by the World Business Council for Sustainable Development.  
At other companies, shareholder resolutions are being prepared or are being 
considered. Thanks to pressure from CA100+, several companies have 
promised more transparency about lobbying activities and membership  
of branch organisations.
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Working conditions in the agricultural supply chain of  
the food, drink and retail sector
Human rights, including working conditions, are the focus of one of our  
seven themes. PGGM and our clients see human rights as a prerequisite  
for responsible investment. We apply the OECD guidelines for institutional 
investors and the UNGPs as a guideline for ESG integration in the investment 
process and we engage with companies where (potential) human rights 
issues play a role. 2018 was the final year of a collaborative engagement 
effort, which focused on working conditions in the agricultural supply chain. 
We engaged with 35 large companies in the food, beverage and retail 
sectors. The goal was to improve the traceability of purchasing activities and 
improve supplier relationships as a means of improving working conditions in 
the global agricultural supply chain. 
This engagement project was completed at the end of 2018. We have  
seen some improvements in the companies we talked to. The availability  
of complaints mechanisms has increased and the monitoring of working 
conditions has improved. We have seen good practices in supplier relations, 
including at Carrefour, which encouraged suppliers to implement corrective 
actions by offering them long-term sales contracts, larger volumes and early 
payments. We also see improvements at Tesco. Tesco has identified due 
diligence focus areas based on a stakeholder meeting. The company frequently 
reviews these focus areas to ensure that risks are correctly identified. PGGM 
has asked the company to provide more transparency on complaint mechanisms 
and suppliers. Tesco has promised to work on this together with a consultant. 
The company is developing a framework for responding to complaints with the 
Ethical Trading Initiative.
Market engagement in 2018
For a pension investor, it is important that the government and market parties 
agree on rules that contribute to ensuring that good pensions can also  
be paid out in the long term. Engagement with policymakers and regulators  
is therefore part of our role as an asset manager. We talk to policymakers  
and sector organisations about reliable and efficient regulations and the 
development of standards in various fields. 
	
First Dutch Stewardship Code (NSC) published 
Good corporate governance enables us, in our role of active shareholder in 
the companies in which we invest on behalf of clients, to also promote social 
and environmental and environmental goals. PGGM is therefore working to 
promote corporate governance standards in the markets in which we invest, 
including in emerging markets. In 2018, the first Dutch Stewardship Code 
was published.  This consists of a set of principles on responsible and 
committed share ownership for pension funds, life insurers and asset 
managers who hold shares in listed Dutch companies. 
As far as possible, the Stewardship Code contains the latest developments 
with regard to shareholder responsibilities under existing and future European 
and Dutch legislation and regulations and self-regulation in the field of 
responsible investment and engaged share ownership, such as the revised EU 
Directive on shareholders' rights, the European Directive for pension funds 
(IORP II) and the IMVB Pension Funds Covenant. Eumedion has created a 
Service Document, together with the Pension Federation. This Service 
Document explains how the principles of the Stewardship Code and the legal 
provisions on responsible and engaged share ownership can be implemented. 
This Code will enter into force on 1 January 2019. PGGM played an active role 
in the Eumedion working group, which was responsible for drawing up the Code. 
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PGGM calls on governments to take concrete measures 
to achieve climate goals
In 2018, we supported a call by IIGCC, the PRI and a number of other 
organisations urging governments to take concrete measures to achieve the 
goals of the Paris climate agreement. This requires a rapid and significant 
reduction in the demand for fossil fuels and other CO2 intensive products.  
The most effective instrument to achieve this is emission pricing based on 
the 'polluter pays' principle. 
Only governments can enforce such pricing and at the same time ensure a level 
playing field. Proper pricing of emissions makes renewable energy competitive 
with fossil fuels, and can thus boost our investments in solutions. For these 
reasons, in 2018 PGGM also joined Ex’tax, which is working to shift the tax on 
labour to a tax on the consumption of raw materials and pollution.
Engagement on incidents
In addition to engagement regarding the themes referred to above, PGGM also 
engages on incidents. For example, reputation-sensitive incidents. We also 
enter into discussions with companies that commit serious violations of the 
UN Global Compact Principles. We ask these companies to terminate these 
violations, implement remedial actions for victims (humans and/or the 
environment) and take measures to prevent the reoccurrence of such 
violations. We use the Global Compact 'non-compliant' list provided by data 
service provider Sustainalytics to identify the companies that violate the 
Global Compact Principles. 
Engaging with Engie about the safety of its nuclear  
power plants
Since 2017 we have been engaging with Engie, the operator of the Belgian 
nuclear power plants Tihange and Doel. There is social unrest about the safety 
of these nuclear power plants, both located just across the Dutch border.  
Over the past year, the company has taken measures to improve the risk 
culture in the power stations. The recommendations of the Belgian regulator 
have also been followed up. The plants are regularly subject to strict controls by 
internal and external supervisors. For each irregularity, the power station is shut 
down until the incident is rectified. Also, good steps have been taken to 
improve communication in the event of incidents. 
Palm oil
At the beginning of November, PGGM, together with a group of institutional 
investors, engaged with ten palm oil producers and authorities in Indonesia 
and Malaysia. For some time NGOs have been conducting campaigns that  
call banks and pension funds to account for their role in the production of 
palm oil and the associated deforestation, forest fires, land conflicts and 
labour rights violations. 
Although palm oil producers are pursuing a 'No Deforestation, No Peat,  
No Exploitation' policy, partly thanks to earlier engagements by listed palm oil 
producers, many things go wrong much earlier in the supply chain. Together with 
clients, we are considering whether we should once again enter into dialogue 
with a sector that accounts for less than € 100 million of the equity portfolio.  
It is also questionable exactly how much can be achieved on the supply side, 
since a large part of the problems can be attributed to government failure. 
Further research on this subject is scheduled in 2019.  
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Dialogue on tar sand oil pipelines
In October 2018, Indian activist and tribal elder Madonna Thunder Hawk  
was in the Netherlands to call attention to the construction of Keystone XL,  
a pipeline through areas of the Lakota Sioux tribe. She had discussions with 
investors, companies and politicians. According to the Sioux, this pipeline 
threatens the drinking water supply of the inhabitants. The pipeline is also 
controversial because of its CO2 emissions and its use for transporting tar 
sand oil.
In October, Madonna Thunder Hawk visited PFZW and PGGM. She asked us  
to sell our shares in TransCanada, one of the builders of the pipeline. During 
this meeting, PFZW explained its investment policy and sustainability ambitions. 
We discussed its implementation. In particular, we discussed the 50% CO2 
reduction target, as a result of which interests in the most CO2-intensive 
companies are being phased out (see page 35 for an explanation of our 
method). TransCanada is one of the companies in which we have been reducing 
our interest in the last few years. Shortly after our discussions, the construction 
of the pipeline was halted by order of a federal judge in the state of Montana, 
who ruled that the pipeline did not meet environmental requirements.
Last year we also made an engagement to ETP, the builder and partial owner of 
the Dakota Access Pipeline (DAPL). The construction of the DAPL in the US has, 
according to stakeholders, been accompanied by the use of excessive force 
against and insufficient participation of the local population. The company is 
also accused by some parties of having a higher than average number of oil spills 
from its pipelines. We asked the company questions about its stakeholder 
management of pipeline projects and its response plan to spills. As we have 
not yet received a satisfactory answer to all the questions, we will trying to 
engage with ETP in 2019.
Engagement with Novartis
Novartis was in the news in early 2018 because of suspicions of bribery.  
As a result, the company has been classified as a 'Global Compact Violator'. 
The biggest bribery scandal was in Greece, where the company is said to 
have maintained close links with various high-ranking politicians. Novartis 
has been working together with law enforcement agencies since the 
beginning of this year to investigate and resolve corruption issues.  
PGGM spoke with the company on several occasions in 2018 and expressed 
concerns about the bribery scandals. Novartis seems to understand the 
urgency of the issue and has taken steps to address risks of corruption within 
the organisation. For example, the anti-bribery policy has been updated and an 
anti-bribery directive has been drawn up for third parties. Novartis has also 
improved its remuneration policies. The variable remuneration of sales 
personnel has been reduced and made dependent on a positive assessment of 
'Values and Behaviour'. The company has also appointed a Chief Compliance 
Officer and elevated this position to the status of member of the Executive 
Committee. We welcome these improvements. We have asked Novartis to have 
the organisation screened for weaknesses by an external party. This will remain 
the subject of discussion in 2019.
 
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17 The OECD guidelines do not refer to ESG, but to Responsible Business Conduct (RBC). As the term ESG is much better known in the pension sector, the covenant has chosen to use the term ESG, meaning RBC as defined in the OECD guidelines. RBC looks at the 
negative impact of companies on society and the environment. This does not, therefore, concern any negative impact of society and the environment on companies (and therefore the investment portfolio of pension funds), which pension funds often refer to as ESG.
18 The definition of due diligence in the OECD guidelines differs substantially from what pension funds and other investors usually mean by due diligence. In the OECD guidelines, due diligence is defined as follows: “the process through which enterprises can identify, 
prevent, mitigate and account for how they address their actual and potential adverse impacts as an integral part of business decision-making and risk management systems.” (OESO, 2011)
Featured: IMVB Covenant
In the past eighteen months PGGM has been intensively involved in the formation 
of the IMVB Covenant for Pension Funds, under the leadership of the Dutch  
Social and Economic Council (SER). Over the next four years, we will work  
towards implementing the covenant together with our clients who have signed 
the covenant, and thereby raise responsible investment to an even higher level. 
In 2018, PFZW started this implementation by reviewing its policy on the basis 
of the OECD guidelines. When is the negative impact on the world a material 
issue and when is it so serious for those affected that we need to focus on it 
regardless of its impact on the company? Next year, we will critically review 
our own ESG risk screening and, where necessary, amend it based on the IMVB 
Covenant and the OECD guidelines.
What is the focus of the IMVB Covenant?
International Socially Responsible Investment (IMVB) concerns the 
implementation of the OECD Guidelines for Multinational Enterprises (OECD 
guidelines) and the UN Guiding Principles on Business and Human Rights 
(UNGPs) by pension funds. The OECD guidance for institutional investors 
provides these investors, such as pension funds, with guidance on how to do 
this. The guidance therefore forms the basis of the IMVB Covenant.
Pension funds that sign the covenant commit themselves to implementing the 
OECD guidelines and the UNGPs in their investment portfolio. The UNGPs state 
that every company has a responsibility to respect human rights. Every 
company must also have a human rights policy. Pension funds are expected to 
have an ESG policy17 based on the OECD guidelines. In addition, pension funds 
must set up an ESG due diligence18 process. Finally, pension funds are 
expected to insist that companies in the investment portfolio which have 
caused a serious negative impact on society or the environment, effect recovery 
and/or redress for the injured parties.
The covenant basically consists of two parts. The first part, the so-called 'broad 
route', concerns the implementation of the OECD guidelines and the UNGPs in 
the investment portfolio of pension funds as described above. The second part, 
the 'deep route', concerns cooperation between the various covenant parties 
(pension funds, the government, trade unions and civil society organisations). 
Over the next four years, the parties will work together on approximately six 
concrete engagement cases together with companies in the listed equity 
portfolio of pension funds. This concerns social issues such as human rights or 
working conditions. The aim of the deep route is to increase the effectiveness 
of engagement processes and to learn from each other as covenant parties. 
The deep route is optional.
Why an IMVB Covenant?
The OECD guidelines are binding on OECD member states, such as the 
Netherlands. The Dutch government has chosen not to impose the directives 
on the business community unilaterally by means of legislation, but to leave it 
to the sectors themselves via International Corporate Social Responsibility 
(IMVO) covenants. These covenants are drawn up by the sectors in consultation 
with trade unions, civil society organisations and the government. 
In 2014, the government commissioned a sector risk analysis to determine 
which sectors in the Netherlands have the greatest risks in terms of corporate 
responsibility. The pension sector is one of the thirteen sectors (in addition to 
textiles and clothing, oil and gas, chemicals, banks and insurers, for example) 
that emerged from this analysis. Since the risks in the pension sector are in 
the investment portfolio and not in the organisation itself, the pension fund,  
the term 'investing' (IMVB) is used rather than 'doing business' (IMVO).
 
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Continuation  Featured: IMVB Covenant
What does the IMVB Covenant mean for our clients?
Pension funds that signed the covenant must incorporate the OECD guidelines 
and UNGPs into their policy within two years, into their outsourcing and 
monitoring within three years and into their reporting within three and a half 
years (transparency). Many funds already partly meet the criteria of the 
covenant, but there is often room for improvement. 
There is also often room for improvement in the recording in relevant 
documents (e.g. responsible investment policy, investment mandates or the 
annual report). When pension funds participate in the deep route, they must 
actively participate in the training sessions organised with regard to the 
engagement cases. This requires capacity from pension funds. 
What does the IMVB Covenant mean for PGGM?
As an implementing organisation, PGGM ensures that it can meet the 
expectations arising from signing the IMVB Covenant with regard to clients.  
The covenant can only be signed by pension funds, not by administrative  
bodies such as PGGM. Nevertheless, because PGGM's clients have signed  
the covenant, it does have implications for PGGM. 
Firstly, PGGM will support clients who have signed the covenant to ensure that 
they can meet the requirements of the covenant. Secondly, PGGM’s clients will 
require PGGM to set up an ESG due diligence process in accordance with the 
OECD guidelines and the UNGPs. PGGM already subscribes to the OECD 
guidelines and UNGPs and also largely complies with the recommendations  
of the guidelines for institutional investors. 
Where this is not yet fully the case, PGGM will bring responsible investment 
practice in line with the OECD guidelines and UNGPs. In this regard, PGGM  
will cooperate with the other covenant parties. PGGM will also contribute to  
the deep route of the covenant on behalf of clients.
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3.2 Voting
By voting at shareholders’ meetings, we exercise our influence as a 
shareholder over the companies in which we invest on behalf of our clients. 
As a long-term investor, voting enables us to exert a guiding influence on a 
wide range of themes: strategic, financial and social/environmental. It literally 
gives us a voice in important company management decisions.
As the basis for their voting behaviour, PGGM and its clients annually draw up 
the PGGM Voting Guidelines, which set out our views on frequently occurring 
voting items at shareholders' meetings. Given the number of shareholders' 
meetings, our voting is largely automated. The basic principle is that we vote 
as advised by our voting service provider (ISS). These recommendations are 
based on the PGGM Guidelines. We actively monitor these voting activities 
based on multiple sources. We vote on the most relevant resolutions 
ourselves. For each company, PGGM publishes its voting record via this website.
Where appropriate, PGGM also speaks at AGMs in order to reinforce our  
vote and to conduct a public debate with the companies in which we invest. 
This applies to Dutch companies in particular. As a result of our scale as a 
relatively large player, we do have actual voting power. 
PGGM also submits shareholder’s proposals by itself, or in cooperation with 
other investors, if we want to encourage a company to take action. This was 
the case, for example, with the Canadian company Alimentation Couche-Tard. 
We regard the right to vote as an important part of our engagement activities 
and vice versa. For example, the right to vote can be used to provide a 
framework for a subject on which engagement has been conducted, or as an 
escalation strategy to translate poor engagement progress into a dissenting 
vote (for example, against the reappointment of a management board 
member).
In 2018, we voted at 3,877 (99,7%) meetings of listed companies in which 
our clients' assets are invested. Based on our clients' voting policy, we voted 
on more than 43,109 proposals. Page 31 shows in which regions and on 
which subjects we voted in 2018.
PGGM abstained from voting on Follow This resolution
In recent years, increased attention to climate change has become visible.  
This is reflected in a growing number of shareholder resolutions. In particular, 
Follow This attracted a great deal of attention in recent years with its resolution 
calling on Shell to firmly commit itself to the objectives of the Paris Climate 
Agreement. 
We abstained from voting on this proposal in 2018 because, on the one hand, 
we endorse the ambitions of the proposal but, on the other hand, we recognise 
that Shell will only be able to achieve the targets if the rest of society - in 
particular the energy demand side - also adapts. Our arguments are set out in 
more detail in an explanation of vote, which is published on PGGM's website. 
During the same period, PGGM was a signatory to an open letter from the IIGCC 
and the PRI to the entire oil and gas sector.
Alimentation Couche-Tard (ACT) is open for discussion after 
shareholders’ resolution
PGGM and Aequo submitted a shareholders’ resolution in 2018 asking ACT for 
more transparency on various ESG issues, including working conditions at the 
company and in the supply chain. 
ACT is one of the companies with which we are conducting engagement with 
regard to working conditions in the agricultural supply chain.  This was an 
escalation strategy after two years of failed attempts to get in touch with the 
company. Our shareholder proposal has had the desired effect: the company is 
now open to dialogue. Just before the AGM, the company issued a statement 
that they have considered our resolution and will increase their transparency on 
sustainability and improve their communication about current efforts and future 
goals to shareholders. This is still just a promise which says nothing about the 
quality of the reporting, but we consider it to be a good first step.
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Netherlands 50
North America 705 
Europe (excl. Netherlands) 716
Shareholders’ Meetings by Region in 2018:
Management Proposals
(by category):
Voting Instructions
in 2018:
Shareholders’ Proposals
(by category):
Voting behaviour
Asia 1,551
Meeting points voted in accordance
management recommendation 33,746
Meeting points voted against
management recommendation 9,363
Anti-takeover scheme 262
Appointment of directors 23,851
Increase in capital share 3,492
For 32,647
Against 9,228
Abstained 1,234
Remuneration 3,491
Mergers and Acquisitions 1,382
Miscellaneous 9,358
1%
57%
8%
8%
3%
23%
76%
21%
3%
1%
19%
18%
22%
40%
Total 3,877
Rest of the world 855
Remuneration 75
Corporate governance 91
Appointment of directors 693
Health and Environment 96
Social conditions 26
Miscellaneous 292
78%
22%
Total
43,109
6%
2%
7%
54%
8%
23%
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3.3	 Legal Proceedings 
PGGM conducts legal proceedings for clients, where necessary, in order to 
recover investment losses and to enforce good business conduct. We do this 
as a shareholder in listed companies, both in the Netherlands and abroad.  
We distinguish between 'active' and 'passive' proceedings. We opt for active 
proceedings if we consider it important that the company changes its 
behaviour and conducting a dialogue has not had sufficient effect. The main 
objective of the legal proceedings in such cases is to enforce a positive 
change in the organisational structure. 
In addition, we sometimes opt for an active role in legal proceedings if we 
believe that a company has acted improperly and our clients have suffered a 
substantial financial loss as a result. In such cases, our main objective is to 
recover as much as possible of the loss suffered on the investment for our 
clients. This is also an attempt to send a signal to the market.  In all cases 
where we actively litigate, we do so together with - and/or on behalf of - other 
investors. These proceedings can be lengthy and very expensive; however, 
because our advisors assist us on a 'no cure no pay' basis, we do not run the 
risk of litigation costs. In some proceedings, it is sufficient for us to 
‘passively’ register our claim. This is a mainly administrative process, in which 
we can recover part of the damage suffered by our clients at minimal effort 
and cost.  
In 2018, we conducted seven legal proceedings on behalf of our clients. We 
initiated proceedings against the mining company, BHP Billiton. The Fundao 
dam in Brazil, of which BHP Billiton is co-owner, collapsed in 2015. This 
resulted in a toxic mudflow that wiped out a village. There are strong 
indications that BHP Billiton was already aware of the risks related to the 
dam. By not disclosing this information, BHP Billiton violated its disclosure 
obligations. In addition to the above catastrophic consequences, investors 
also suffered losses as a result of this violation.
 
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19 In 2018, we stopped using our best in class ESG inclusion method in the beta equity portfolios. This method proved not to be robust enough to achieve a cleaner portfolio and reduce reputational risks. In 2019, we will be working on a new screening method.
ESG
4.	
ESG integration: For a better risk-weighted return
As an asset manager, we carry out an investment assignment for our institutional clients. Central to this is the 
optimal weighing of risks and expected returns. In this assessment, we also take ESG criteria into account in order  
to achieve a better risk-weighted return. ESG factors can have an immediate or indirect impact on financial results. 
Examples are climate-related financial risks, such as more extreme weather conditions that lead to higher claims 
from insurers. Or a scandal about CO2 emissions, such as was the case with Volkswagen and which ultimately led  
to a downward revision of its credit rating. Companies with inadequate safety and risk management run a greater 
risk of incidents and accidents, which can then lead to a loss of profitability or an increase in risk.  
4.1	 ESG integration in figures
We can never completely eliminate risks. This is also not our task: there is no 
return without risk. What matters is whether our clients are rewarded for the 
risks they face. When the identified risks negatively affect the future expected 
return, PGGM may decide not to invest or to demand a higher expected return.
We do not see ESG risks as a separate set of non-financial factors but as 
non-traditional sources of financial risk. ESG criteria are a way of analysing 
financial risk in the long term. Although academic literature has currently 
produced considerable evidence that attention to ESG factors actually leads  
to better investment performance in a financial sense, it is important for our 
clients to be able to see this in the results of the various programmes that  
focus on ESG factors. Currently, these are the CO2 reduction programme and the 
exclusions policy.19  
PGGM has been measuring the financial consequences of these instruments  
for a number of years. In the past, a great deal of attention has been paid to the 
question of whether ESG policy leads to higher returns on investments. Our 
calculations show that, to date, these instruments have not had a significant 
impact on the returns on investments. 
Returns, however, are inseparable from the risk of the investments. Academic 
meta-studies on the impact of ESG policy on investment performance suggest 
that improved performance is mainly due to risk reduction. It is therefore also 
important to measure the impact of ESG policy on risk. Within the context of  
the current ESG instruments, there is no significant difference in risk in terms  
of the volatility of the portfolio's returns compared to a generic equity index 
(without adjustments).
It is crucial for us and our clients to be able to properly understand and monitor 
the actual impact of the policy on the performance of the investments. This 
applies both to the impact on returns as well as the impact on the risks. It is  
not enough to merely determine the extent of the impact. We also want to better 
understand whether there is a certain pattern to the influence on returns, for 
example whether the responsible investment instruments result in less acute 
negative outliers. Multi-year data is required for this. These influences will 
become clearer as and when we have more data available. This will allow us to 
better substantiate the consequences of the ESG policy on investment results 
and enable our clients to make more competitive choices in their policy in  
this respect.
‘It takes resources, efforts and guts to integrate 
ESG factors properly.’
Roelof van der Struik Investment Manager
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20 Part of the invested assets are managed by external managers. When selecting, monitoring and managing external managers, we include aspects relating to responsible investment. We aim to select external managers who share our ESG vision and that of our 
clients, and who devote proper attention to material ESG risks and opportunities in their investment processes. These factors also are a fixed item on our agenda of the regular review meetings with external managers. Precisely how the External Management Team does 
this was set out in Public Guidelines in 2017.
ESG
4.2	 Materiality
In order to assess whether ESG factors for a specific investment are material to 
our financial position, PGGM sets up processes to be followed for investments. 
In the first instance, it is essential that factors that potentially have a major 
impact on the future performance of the investments are identified. These 
factors vary by industry/sector and by geographical location and activity.
In order to assess materiality, it is therefore necessary that the investment 
teams with knowledge of the investments form an opinion about the ESG factors 
that are relevant. The teams use different data sources and the publications of 
the company or manager of the investment. These factors are then systematically 
screened. Investment teams draw up requirements for this, with the help of the 
Responsible Investment team. In addition, industry associations have drawn up 
frameworks to create uniformity in the reporting of important ESG data. For 
example, our real estate and infrastructure teams use GRESB to measure 
sustainability performance. For more information on this topic see page 39.20
Standards are therefore gradually being developed, which allow ESG risks to be 
requested, measured and reported. At the end of 2018, PGGM became a 
member of the Sustainability Accounting Standards Board (SASB) alliance, which 
has the goal of achieving standardised reporting specifically with regard to the 
materiality aspects of investments. SASB has compiled indicators for 77 
industries with ESG factors that can be financially material. The advantage of 
using this standardised method is that the investment teams at PGGM can use 
the same structure to assess materiality risks.
Positive impact versus negative impact
Earlier in this report we talked about our efforts to identify the positive 
impact of our investments. However, we also want to do justice to the 
drawbacks of the investments (negative impact).  
When it comes to impact investments, the focus is often on the positive 
impact, but does this give a complet pitcture? Do we not risk maken wrong 
management decisions if we only focus on positive impact? In short, have 
indicators been developed to measure all relevant and significant social and 
environmental impact that is created (or destroyed) by the companies in which 
investments are made? Does this also include intended and unintended 
negative impact? 
MSCI, S&P/Trucost and FTSE Russell, among others, are experimenting with 
ways to score and balance positive and negative impacts. With scores on a  
5 or 10-point scale, different impacts and themes may be comparable. This, 
however, comes at the expens of addability and communication of absolute, 
tangible impact. A net 'impact score' is also accompanied by the necessary 
assumptions and value judgements that do not necessarily benefit objectivity 
and transparency. PGGM is closely following these developments, for example 
through the ‘SDG Evaluation Tool’ of the advisory council of S&P/Trucost,  
which was released in November.
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ESG
Featured: The risks of climate change 
Drought, floods and other forms of extreme weather can have an impact on the 
companies, projects and real estate we invest in. The most recent report of the 
Intergovernmental Panel on Climate Change (IPCC) underlines the urgency of  
additional measures and highlights the major physical risks, even if global 
warming is limited to 2 degrees Celsius. This is also DNB's view: it sees climate 
change as a systemic risk that could disrupt the Dutch financial system and 
ultimately the real economy. The inclusion of climate-related risks in the invest-
ment policy remains very challenging due to the high number of uncertainties. 
The initiatives below, however, give us a better grip on the problem and allow us 
to gradually take the financial risk of climate change into account.
The risks
PGGM distinguishes two types of risks: physical risks and transition risks. 
Physical risks arise as a result of climate change. Transition risks arise 
because society tries to eliminate the causes of climate change - greenhouse 
gas emissions. However, climate change is a risk that is difficult to quantify: 
how do you estimate which technology will ultimately win, or which companies 
will be most affected by a high CO2 price? And in today's globalised world, it is 
unclear which areas companies depend on. Some companies do not even have 
that insight themselves, partly because production chains have become very 
long. However, there are a number of things an investor can take into account. 
PGGM is working in various ways to get an even better grip on the effects of 
climate change - and measures to combat climate change - on the portfolios.
Figure 3
Types of risks
Climate monitor
Following on from our climate research, which we completed in 2017, last year 
we developed a climate monitor that provides insight into the direction of 
climate change and the pace of the energy transition. If the policy remains the 
same, the world and PGGM must certainly prepare themselves for considerable 
physical damage as a result of rising sea levels, more frequent and more 
severe extreme weather, etc. It is not enough just to look at investments for the 
transition and the associated risks, but also at the risks arising from the failure 
or partial achievement of the climate goals. Even if the climate goals are met, 
there are still physical risks that will materialise. Because there is no certainty 
of the outcome of the measures and the actual impact on global warming, we 
as investors should not focus on one scenario, but should include a palette of 
possible outcomes in the risk estimates.
All our investment teams within private markets pay explicit attention to climate 
risk where relevant when making new investments. Due to the limited liquidity 
of the investments concerned and the long investment horizon that applies to 
them, these investments in particular may have a higher than average sensitivity 
to climate risk. The explicit weighting of climate risk in the investment portfolio 
means that climate change as a financial risk receives the necessary attention. 
In 2018, Risk started developing a CO2 stress test on clients' portfolios. 
Another example is that the physical locations of real estate investments are 
linked to climate models. This provides insight into which part of the property 
portfolio is vulnerable to rising sea levels and extreme weather. For more 
information on this topic see page 38.
CO2 reduction in investment portfolio
Like most economists, we believe that better pricing of CO2 and other 
greenhouse gases is the most effective and fair measure to counteract further 
global warming. We are convinced that a higher CO2 tax is inevitable in the  
long term. 
Transitions risks
Switch to a CO2 neutral world
through policy and technology
Physical risks
Rising sea level, extreme weather,
water scarcity, et cetera
CARBON NEURTRAL
VLOED
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21 At the beginning of 2015, we identified the CO2 emission of all companies in the equities portfolio and determined a baseline reference for halving emissions (31-12-2014 serves as the portfolio reference date). For this purpose, we use data on CO2 emissions from portfolio companies 
that we purchase from the specialised data supplier Trucost. Emission data is only available with a delay, as a result of which these data are at least one year behind the portfolio reference date. An elaborate description of the measurement method is available on PGGM's website.
22 In addition to the company’s own CO2 emissions (Scope 1), this also comprises electricity consumption (Scope 2) and part of the CO2 emissions of direct suppliers (Scope 3). The equity investments managed by PGGM for the benefit of its clients to whom this 
applies, amounted to € 52.6 billion at the end of 2018.
ESG
Continuation  Featured: The risks of climate change 
With this in mind, we started to reduce the footprint of the equity portfolio a few 
years ago. We accomplish this by reallocating investments in the most CO2 
intensive sectors - energy, utilities and materials - to relatively CO2 efficient 
companies. In our view, companies with high emissions are inadequately 
prepared for a low CO2 future and these companies are therefore gradually 
disappearing from the portfolio. We will keep the sector allocation unchanged, 
because we believe that all sectors will continue to play a significant role in a 
low CO2 economy. This reduction can act as a hedge against a possible decline 
in the value of investments with a large CO2 footprint.
We have been commissioned by our largest client to halve the CO2 emission  
of investments by 2020 in comparison to 2014.21 Since the baseline 
measurement, the CO2 footprint has been reduced from 339 tonnes of CO2 per 
million dollars of company turnover to 239 tonnes of CO2 per million dollars as 
at 31 December 2018.22 In the period from year-end 2017 to year-end 2018, 
this reduction was from 244 tonnes of CO2 per million dollars of company 
turnover to 239 tonnes. The decline has been lower than expected. This is 
mainly due to the CO2 data we use. Many companies and even entire sectors are 
gradually showing a higher CO2 intensity. The historical data, in contrast, show a 
steady decline. This means that there has been a trend break in recent years.
We measure our goal from a historical point in time, namely the CO2 footprint at 
the end of 2014. This means that if the entire market becomes more CO2 
intensive over the years, our goal becomes all the more difficult to achieve. This 
is also what we see in the figures. Over the entire period, the broad market 
(FTSE All World) has become no less than 10% more CO2 intensive, while 
PGGM's equity portfolio has become 29% less CO2 intensive. This indicates 
that the method of management does have an effect. 
It is not yet 2020. The market may become less CO2 intensive in the coming 
years, thus making it possible to achieve the goal of 170. We are talking to our 
CO2 data provider to explore the causes of the observed increase in CO2 
intensity in the broad market. This allows us to explore whether something 
needs to change in the methodology or the goal. We do take into account that 
reaching the number ‘170’ is a translation of the higher goal, but not the goal 
itself. The ultimate goal is to include CO2 data in the equity portfolio, to 
encourage companies to reduce their CO2 emissions and to encourage them to 
develop a robust climate strategy.
TCFD
In 2018, the Task Force on Climate-related Financial Disclosures (TCFD) 
published its first status report. The report provides an overview of the current 
state of climate reporting and provides tools to help the drafters implement the 
recommendations. The TCFD concludes that businesses are on the right track 
with climate reports, but also that - as expected - considerable steps still need 
to be taken, particularly in the area of scenario analysis and the translation of 
operational standards into financial standards. We wholeheartedly support this 
goal and are therefore pleased that the mandate of the TCFD has been 
extended until mid-2019.
More details of how PGGM deals with climate-related risks can be found on our 
website. On the website, we report according to the TCFD recommendations.
In 2018, we joined the Investor Leadership Network (ILN), a G7 initiative of 
investors who share a common commitment to sustainable long-term growth. 
One of the ILN's spearheads is improving TCFD reports. By exchanging 
knowledge within this network, we will further refine our own TCFD reporting in 
the coming years.
 
 
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ESG
4.3	 ESG integration in practice
Integrating ESG effectively is not easy. There are no clear standards and 
definitions. There is also much to be gained in terms of disclosure, the data 
that companies provide on their environmental policy, social conditions and 
good governance. In addition, sometimes qualitative assessments have to be 
made - how can respect for human rights be expressed in financial models? 
ESG integration also requires investors to change their mindset and it 
requires the necessary skills. We worked on this again in 2018. 
The various investment teams have defined goals that focus on improving 
ESG knowledge, reviewing some of the existing instruments and improving 
monitoring and the reporting of the results of our efforts.  We have also 
developed a new method for evaluating our internal teams and comparing 
them to external colleagues. This method has been aligned with how we 
assess our external managers, so that we have a common standard for what 
we expect from both external and internal managers when it comes to ESG 
integration. We use these assessments as a tool to take ESG integration per 
asset class to a higher level.
At PGGM, ESG integration is mainly placed bottom-up with investors. Within 
the limits of the client mandate, our investors have the freedom to determine 
the direction of the portfolio themselves and the obligation to report on 
progress. ESG plays a central role in this, as do financial returns. On a daily 
basis, decisions are made based on financial and non-financial information. 
The approach differs for each investment category. This difference is caused 
by the degree of influence PGGM has on the investment process, for example 
on deciding whether it will be managed externally or internally.  It also makes 
a difference whether the investment strategies are passive or active. 
Furthermore, the effect that the ESG factors have on the investment category, 
such as risk reduction versus improvement in return, also plays a role. For the 
more active mandates, the portfolio manager integrates ESG information into 
the analysis of a company, country or project, making ESG analysis an integral 
part of the investment decision.
On the following pages, some of our employees talk about how ESG factors 
are integrated into the investment process in practice.
Examples of ESG integration
Private Markten
- Infrastructure
- Private Real Estate
- Private Equity
- Credit Risk Sharing
- Insurance Linked
- Selection managers (ESG assessment)
- Due Diligence
- Monitoring and engagement GP, Fund 
manager and enterprise/asset
- Incident reporting and ESG KPIs reporting
Public Markets
- Long-Term Equity Strategy 
- Systematic Equity Strategies
- Listed Real Estate
- IG Credits
- Emerging Market Credits
- Rates
- Treasury & trading
- Active, direct selection of companies
- Monitoring (ESG screening and  
sustainability ladder)
- Engagement in credits and equity
- Voting 
- Impact universe construction
- CO2 index
External Management
- Selecting, monitoring and managing external 
managers for ESG integration
- Reporting
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ESG
ESG integration in practice: Climate related risks and the impact 
on listed real estate
Recently, awareness that climate-related risks are relevant has increased  
rapidly among investors and companies. Pressure from society and the regulator 
demands a proactive attitude from investors in the area of climate change.  
Ewout Schoemakers and Kerim Ural, Investment Managers at PGGM, explain  
how climate risks within the Listed Real Estate portfolio are made transparent.  
“We invested a lot of time last year into understanding the risks and impact of climate 
change on our portfolio. We are now able to identify and list (‘map’) important climate-
related risks for our portfolio up to building level, such as sea level rise, hurricanes and 
forest fires. One could suggest that these are risks that materialise far beyond the 
investment horizon. This is true, but the measures taken by governments and 
companies do fall within our investment horizon. We therefore consider it very 
important to gain insight into the potential impact on our portfolio at this stage.”
Figure 4
Flood risk of listed real estate due to 1 metre rise in sea level New York
An example to illustrate how we have mapped out the impact of rising sea levels 
and the risk of flooding. “This risk is particularly relevant for real estate, as many 
large cities are located on the coast or rivers. First of all, we mapped individual 
buildings of all companies in our benchmark geographically. We then simulated  
the consequences of a rise in the sea level, under different scenarios, providing 
insight into physical consequences. Finally, we filtered the data of the buildings 
that are exposed to the risk of flooding. This gives us insight into the relative 
exposure to this risk per company.”  
 
 
Quantifying the final impact is a challenging next step. “We do this by making 
estimates of investments in preventive measures, such as insurance premiums.  
In addition, there are the indirect consequences, such as limited access to 
infrastructure. In addition to the analysis of the direct impact, we are therefore 
working on a framework to provide insight into the indirect consequences of these 
risks. Through data-driven analyses and the linking of different databases, we are 
increasingly able to distinguish those real estate portfolios that are expected  
to experience a greater impact. Ultimately, this can lead to a discount on the 
valuation of a company. At present, the direct impact of climate-related risks is  
still limited, but by making this clear, the risks can be monitored more efficiently 
and inefficiencies in the market can be better priced and utilised. New data is 
becoming available all the time, enabling us to further refine our analyses and 
thus remain at the forefront in this area.”
Kerim Ural
Ewout  
Schoemakers
‘We are now able to identify 
and list (‘map’) important  
climaterelated risks for our 
portfolio up to building level.'
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ESG
ESG integration in practice: human rights 
Integrating human rights into the investment process is a 
challenge, especially with regard to passive investment via an 
index. Jelena Stamenkova van Rumpt, Senior Advisor Responsible 
Investment and Human Rights expert, explains the challenges:
“Compared to other topics, there is much less information available about human 
rights and working conditions at companies. The data we purchase from external 
suppliers on these subjects is focused on the policy and implementation activities 
of the companies in which we invest, not on the actual results. This makes it 
difficult to make investment decisions based on the data. 
This year we decided to support the Workers Disclosure Initiative. In doing so,  
we aim to create a common framework for reporting on social issues. We want  
to encourage companies to monitor their performance and make this publicly 
available. This gives companies insight into their own performance and 
stimulates them to improve on it.
We have also worked on increasing our own knowledge so we can better 
assess risks in the area of human rights and working conditions. Among other 
things, we organised meetings with human rights experts from various Dutch 
companies, banks and investors, where we exchanged knowledge and 
discussed dilemmas. In January, PGGM and Shift organised an internal 
workshop on human rights and labour rights with the aim of raising awareness 
and knowledge among investment professionals and further developing 
instruments and guidelines. Shift is a leading organisation that was involved  
in drawing up the UN Guiding Principles for Business and Human Rights.  
Having an external supplier like SHIFT to develop the workshop gave us  
both knowledge and insight into the possible gaps in our processes and 
instruments. The workshop was a success and gave our investors practical 
examples of how to integrate human rights into due diligence.”  
ESG integration in practice: GRESB as an indicator
PGGM invests in a large number of real estate funds and joint 
ventures throughout the world. ESG considerations are fully 
integrated into the screening, selection and monitoring 
processes of real estate funds. Sebastiaan Blom, Associate  
Investment Manager, explains:
“During 2018, private real estate investments again outperformed the Global 
Real Estate Sustainability Benchmark (GRESB), which compares funds on 
sustainability. The PGGM fund outperforms the global GRESB average, which 
includes 903 real estate companies and funds, and the relevant benchmark 
(private real estate). Our portfolio score has increased again compared to last 
year, both in terms of policy and implementation. In addition, 88% of our 
investments that participate in GRESB can now be classified as Green Star. 
30% of our participating investments, with a total volume of € 3.3 billion,  
are even among the 20% best-scoring GRESB participants.”
GRESB results are used by PGGM to discuss sustainability with the 
management of the companies and funds in which we invest. “We consider  
it important that our investments continue to show progress in terms of 
sustainability and GRESB enables us to compare them with their peers.  
This not only involves policy and transparency, but also implementation and  
the measurement and reduction of energy consumption, CO2 emissions,  
water consumption and waste.”
Based on the 2018 GRESB results, we are currently looking at which 
investments require extra attention because they do not show the desired 
progress in relation to the market or expectations. In addition, a GRESB due 
diligence assessment has been available for new investments since November 
2017. This assessment gives an indication of the GRESB score and can further 
help us to make our portfolio more sustainable. In 2018, a first pilot was 
carried out with a new investment using this new assessment tool. This 
provides input for ESG improvements even before the first official GRESB 
participation in an investment.
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ESG
ESG integration in practice: Human rights  
issues in the electric car supply chain  
Our investors engage with portfolio companies from a  
risk/return perspective. Sevinc Acar, senior investment 
manager credits, explains: 
‘The energy transition, and specifically the transition to electrically driven 
transport, brings with it new dilemmas for investors. This transition is not 
without problems when it comes to the extraction of raw materials and the 
environment, the recyclability of new products and concerns about human 
rights. 
For example, the electric car, which is the new 'clean' symbol of energy 
transition in transport among other places. Cobalt, an important raw material 
for the production of powerful batteries, is mined in Congolese mines, 
sometimes under appalling conditions. A report by Amnesty International shows 
that child labour is a major problem in the cobalt supply chain. Cobalt miners 
are also often exposed to high levels of toxic metals and working conditions in 
the mines are often poor. Encouraged by these reports on serious abuses in 
cobalt mining, we conducted discussions with a group of 20 Dutch and foreign 
investors with regard to the 15 globally operating companies that use cobalt. 
We conducted this dialogue as part of our risk management.  In addition, we 
also see it as our moral responsibility as managers of the assets of pension 
participants.” 
As part of this collaborative engagement process, in 2018 PGGM engaged with 
Daimler, a manufacturer of cars including Mercedes-Benz. At Daimler, as at 
other companies that are heavily dependent on cobalt, the origin of the raw 
material is often not known. We asked Daimler to be transparent about the 
origin of the raw material. We have also called for strict action to be taken with 
regard to possible violations of human rights. Daimler was receptive to this 
dialogue, certainly because this cobalt engagement coalition represents many 
hundreds of billions of euros of invested capital. These are coalitions that 
multinationals cannot ignore: behind this enormous amount of invested capital 
are the consumers (such as participants in pension funds) which are the focus 
of their marketing. In 2019, we will continue to hold Daimler to account for its 
responsibilities in the cobalt supply chain. 
ESG integration in practice: Sustainable tax
In recent years, the international debate has often focused on 
the levying of taxes and the taxpayer's responsibility in this 
respect. In June 2018, PGGM published its Sustainable Tax 
Position Paper. In this report, PGGM provides stakeholders with its vision of how 
to deal with taxation in a socially responsible manner. Niels Krook, Principal Tax 
Counsel at PGGM, explains: 
“As Principal Tax Counsel in the Tax, Legal & Regulatory team of PGGM Investments, I 
am responsible for the taxation that plays a role in the global investment portfolios of 
our clients and PGGM funds. An important principle for us is that participants' pensions 
are not taxed more than once. In an often complex international tax environment, we 
want to operate in a socially responsible manner. To this end, PGGM has developed 
tax positions which are implemented in our investment activities. The core of our 
policy is that the tax aspects of investments are always comprehensible, manageable 
and explainable, that double taxation is avoided as much as possible for the pension 
funds and their participants and that greater transparency on tax issues is necessary.”
These positions relate in the first instance to PGGM's own tax behaviour and the way 
in which we structure investments in a responsible manner for tax purposes. Over the 
past year, we have analysed the existing portfolio on the basis of these principles. 
New investments will be made in line with the new policy. In existing investments too, 
fiscal sustainability can sometimes lead to a different structure. “An example of this 
is the restructuring of an existing Asian fund in which passive holding companies, 
established in offshore jurisdictions, will be dissolved.”
We actively engage in public discussions about tax principles that affect pension 
funds and their administrators. PGGM actively promoted the Sustainable Tax Position 
paper, both internally and externally, and discussed it with various parties including 
co-investors, external fund managers, national and international peers and advisers. 
For example, we spoke at a seminar of the Danish Pension Federation in Copenhagen, 
in round table sessions with other international investors and held a dialogue with 
various investment managers. The aim is to create more awareness about this 
subject in the investment world. We are actively discussing how to further develop 
this relatively new subject in a sound manner.
We are currently working on an additional sustainable tax policy that formulates our 
expectations with regard to the companies in which we invest. But also with regard to 
parties who are appointed to manage investments, such as external fund managers.
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5.	
We set limits: exclusion
We want to avoid making investments that do not suit our clients’. This is why, in accordance with the PGGM 
Implementation Guideline, we exclude companies that are involved in controversial weapon and tobacco activities from 
the PGGM funds and internally managed mandates. In addition, we do not invest in government bonds of countries that 
are the subject of sanctions by the UN Security Council and/or the European Union (EU). In addition, we may exclude 
companies with elevated ESG risks. In such instances, we first attempt to realise improvements by engaging the 
company in dialogue. 
5.1 Implementation of exclusions
If clients wish to apply a stricter minimum limit to their investments, PGGM 
facilitates the implementation of this. If the participants in the PGGM funds 
jointly agree on additional exclusion criteria, PGGM will generally apply them to 
all relevant PGGM funds. In this way, a decision was taken in 2013 to exclude 
tobacco companies from investing in PGGM funds. In concrete terms, this 
means that companies engaged in the production of tobacco and/or tobacco 
products (such as cigarettes, cigars, chewing tobacco, etc.) are excluded. If 
participants fail to agree on additional exclusion criteria, at the request of 
individual clients, PGGM will try to set up segregated mandates to which the 
additional criteria will be applied. Clients may also choose to apply these 
exclusion criteria to external mandates or to funds in which they invest 
directly. 
5.2	 Exclusions in figures
Exclusions result in deviations of the investment portfolio from the reference 
index. In the short term, these can be both positive and negative. As stated 
earlier in this report, we are committed to being able to quantify the 
influences. In concrete terms, this means that we keep track of the effect of 
the exclusions on returns. The data show that the product exclusions on 
tobacco in particular has had a positive effect, while the product exclusions 
on weapons has slightly reduced the return on equity investments.  
2013-2018
Total effect
CO2
0.078
Weapons
-0.643
Weapons - AFM prohibited
-0.100
Tobacco
0.239
Engagement-related
0.132
	
 
2018 YTD Q4
Total effect (Optimisation effect under CO2 segment)
CO2
-0.018
Weapons
-0.068
Weapons AFM prohibited
0.017
Tobacco
0.314
Engagement-related
-0.015
5.3	 Whether or not to exclude
The potential conflict in the case of exclusion is that we lose our influence if we 
do not have an interest in a company. Exclusion does send out a strong signal, 
however, and can lead to change if a company wants to win back investors. 
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Walmart
On behalf of clients, PGGM excluded the American supermarket group Walmart 
from investment in 2013. The main reason: Walmart's policy in the US at the 
time limited the options of employees to organise themselves into trade unions. 
This is in conflict with international (ILO) labour guidelines. In the subsequent 
five years, Walmart has improved its policy towards employees. In 2018, 
Walmart published a statement on human rights and a Global Responsibility 
report, which states that Walmart respects the rights of association (in trade 
unions) and collective bargaining of employees. PGGM and its clients applaud 
this change in policy. In 2018, we again entered into discussions with Walmart 
and asked them about the results of this new policy in practice. In 2019, PGGM 
will work together with its clients on a process to re-evaluate companies that 
have made substantial improvements. 
Tar sand oil 
In July, Greenpeace protested with a leaking pipeline at the entrance to 
PGGM's offices in Zeist. Greenpeace asked us to withdraw our investments in 
companies that build pipelines for the transport of tar sands. A considerable 
amount of CO2 is produced by extracting oil from tar sands, and Greenpeace 
believes that maintaining a tar sands infrastructure is out of step with the 
implementation of the agreements of the Paris Climate Agreement.
PGGM had previously entered into discussions with Greenpeace about these 
investments, the policy of our clients and our vision of the sector. PGGM 
understands Greenpeace's concerns very well. While we want to contribute to 
Paris agreement, we want to do so in a different way than the environmental 
organisation demands of us. Energy companies that extract an above-average 
share of their oil from tar sands are disappearing from our equity portfolio due 
to high CO2 emissions (for more information on this see page 35). These 
companies put short-term returns ahead of the long-term sustainability of 
their business model and we therefore do not believe in engagement with 
these companies. 
Nevertheless, we have retained our interests in three companies named by 
Greenpeace: Enbridge, Energy Transfer Partners (ETP) and Kinder Morgan. Why 
hold on to something that only comprises 0.03 percent of our client portfolio? 
We get asked the question, why not sell? 
For energy companies with a much smaller share of tar sand oil, we do not 
think selling is the right solution. We prefer a constructive dialogue in which 
we draw the companies' attention to the risks of these activities to the 
environment in the short term and to their profitability in the long term. If we 
were to withdraw and sell our shares, they would be in the hands of investors, 
who would probably have fewer objections to tar sands and would not disturb 
the companies. 
As far as our investments in pipelines are concerned: Pipeline transport of oil 
offers a number of advantages, such as low costs and low CO2 emissions 
compared to transport by tanker or diesel trains. However, these advantages 
only outweigh the disadvantages if the pipeline is properly laid, if the response 
to any leakage is quick and appropriate, and if the rights of the local 
population are respected during the construction process. Leakages and 
human rights therefore have our full attention, and we are committed to them. 
In 2018, we spoke with American Indian activist Madonna Thunder Hawk, 
tribal elder of the Lakota Sioux, about this. We also discussed this with ETP. 
For more information on this topic see page 27.
 
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Outlook	
In 2019, we will continue to devote efforts to realising both financial 
and social and environmental returns. We are therefore looking for new 
opportunities to invest the pension capital of our clients sustainably at 
an attractive return.
At the beginning of 2019, we took a step in this direction by structuring the 
Private Equity portfolio of funds and co-investments around the four themes of 
Investing in Solutions. In particular, the aim is to invest in smaller, high-impact 
funds and companies that focus on solutions. We expect PGGM to be able to 
carry out interesting transactions in this context in 2019, which will underline 
our ambitions in this respect. We are also looking at ways of investing 
profitably in energy transition, if possible in the Netherlands. A good example 
of this is our announcement at the beginning of 2019 that we were joining a 
consortium together with Shell to see if we could acquire Eneco. 
Measuring the social and environmental impact of investments remains 
important to us. With the help of external experts, we are exploring the 
possibilities of developing an impact database that can provide this insight.
In addition to these positive-impact related activities, we will continue to 
engage with companies, including pharmaceutical companies, with regard to 
transparency in the pricing of medicinal products and their affordability. We 
feel a special commitment to this, given the support of our largest client.
The investment teams will increasingly work according to a common structure, 
inspired by SASB. This will make it possible to further increase knowledge 
sharing, as well as measuring and examining sustainability in the investment 
portfolios. We are increasingly using the data that is available to us to 
quantify the sustainability of the portfolio. In 2019, we anticipate that more 
and more attention will be paid to the physical consequences of climate 
change, in which scenario analyses and spatial finance will play an important 
role. Spatial finance is the idea that satellite images and big data at the level 
of individual assets will allow us to better assess risks. We have already 
made a start with this in our real estate portfolios.
Within the Investors Leadership Network, we are working on further 
improvements in disclosure according to the framework of the TCFD. The aim 
is to develop guidelines for the members of the network and to publish these 
by the end of 2019. In 2019, the working group will extend its focus to the 
disclosures of investee companies: how can we best use them for investment 
decisions and active ownership?
The signed IMVB covenant means that PGGM will start implementing it  
on behalf of its clients in 2019. We are developing an ESG screening 
methodology that must also include the OECD guidelines and IMVB criteria.  
In preparation for the implementation of this screening, as of 1 January 2019 
we will only present product exclusions and legal exclusions on our website. 
We no longer present the exclusions after engagement on the website: this 
category of companies is expected to change because of the increased 
requirements for screening and the call for shareholder dialogue on ESG-
related issues.
The current thinking about positive impact is also developing. The publication 
of the SDI volume in this annual report is the starting point for further 
discussion and research on measuring impact, both financially and physically.  
We also aim to improve the identification of the negative impact of these 
investments.
A number of our clients will be drafting new investment policies in 2019,  
in which the OECD guidelines and the IMVB covenant are important factors. 
We are happy to make an impactful contribution to this policy development 
and its implementation. 
 
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The PGGM Beliefs and foundations and the PGGM Responsible Investment 
Implementation Framework, suplemented by implementation guidelines for 
individual investment categories, apply to all investment and advisory 
activities that fall within the following three categories:
(1)	We manage various PGGM mutual funds in which multiple clients 
participate, as well as the activities of PGGM Treasury B.V.
(2)	We manage internal mandates for individual clients. 
(3)	We provide implementation advice to clients that invest in externally 
managed mandates via PGGM. 
We also manage external mandates to which the PGGM Beliefs and Principles 
and the PGGM Responsible Investment Implementation Framework are not 
directly or indirectly applied (4).
 
	
Appendix 1 Implementation of Responsible Investment	
Clients’ Responsible Investment Policy
PGGM Beliefs and Principles
PGGM Responsible Investment Implementation Framework
1 
PGGM Funds
Participants’ Meeting
3
Externally managed 
mandates
Implementation advice 
responsible investment
2
Internally managed
mandates and PGGM 
Treasury B.V.
4
Externally managed 
mandates
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Companies with which PGGM and GES engaged during 2018
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
ACCIONA
Spain
Europe 
(excl. the Netherlands)
ADANI ENTERPRISES
India
Asia
ADANI PORTS AND SPECIAL ECONOMIC ZONE 
LIMITED
India
Asia
ADANI POWER
India
Asia
ADITYA BIRLA FIN.
India
Asia
AGRICULTURAL BANK OF CHINA LTD
China
Asia
AIRASIA BERHAD
Malaysia
Asia
AKBANK
Turkey
Rest of the world
Alimentation Couche-Tard Inc. Class B
Canada
North America
ALLERGAN
Ireland
Europe 
(excl. the Netherlands)
ALROSA
Russia
Rest of the world
ALSTOM
France
Europe 
(excl. the Netherlands)
ALUMINUM CORP OF CHINA LTD-H
China
Asia
AMAZON.COM
United States
North America
American Express Company
United States
North America
Amgen Inc.
United States
North America
ANDRITZ AG
Austria
Europe 
(excl. the Netherlands)
ANGLOGOLD ASHANTI LTD
South Africa
Rest of the world
AP MOELLER MAERSK
Denmark
Europe 
(excl. the Netherlands)
APPLE INC
United States
North America
ARABTEC HOLDING
United Arab Emirates
Rest of the world
ARCELORMITTAL
Luxembourg
Europe 
(excl. the Netherlands)
Archer-Daniels-Midland Company
United States
North America
ASR the Netherlands NV
Netherlands
the Netherlands
Astellas Pharma Inc.
Japan
Asia
ASTRA AGRO LESTARI
India
Asia
ASUSTEK COMPUTER INC
Taiwan
Asia
ATLANTIA SPA
Italy
Europe 
(excl. the Netherlands)
BANCO SANTANDER BRASIL
Brazil
Rest of the world
BANCO SANTANDER SA
Spain
Europe 
(excl. the Netherlands)
BANGKOK BANK PUBLIC
Thailand
Asia
	
Appendix 2 Engagement 
Annual Responsible Investment Report 
45
Table of contents
Highlights 2018

Bank of America
United States
North America
BANK OF BARODA
India
Asia
BARRICK GOLD CORP
Canada
North America
BARRY CALLEBAUT AG
Switzerland
Europe 
(excl. the Netherlands)
BASHNEFT
Russia
Rest of the world
BAYER AG
Germany
Europe 
(excl. the Netherlands)
BEZEQ
Israel
Rest of the world
BHARAT ELECTRONICS
India
Asia
BHARAT HEAVY ELECTRICAL
India
Asia
BHP Billiton Limited
Australia
Rest of the world
BOLIDEN
Sweder
Europe 
(excl. the Netherlands)
BOLLORE
France
Europe 
(excl. the Netherlands)
BP p.l.c.
United Kingdom
Europe 
(excl. the Netherlands)
BRASKEM SA
Brazil
Rest of the world
BRASKEM SA-ADR
United States
North America
BRAZILIAN PETROLEUM CORPORATION
United States
North America
BRF-BRASIL FOODS SA-ADR
United States
North America
Bristol-Myers Squibb Company
United States
North America
Bunge Limited
United States
North America
BYD CO LTD
China
Asia
CAIXABANK SA
Spain
Europe 
(excl. the Netherlands)
Carrefour SA
France
Europe 
(excl. the Netherlands)
CBS Corporation Class B
United States
North America
CCR SA
Brazil
Rest of the world
CEMEX
Mexico
Rest of the world
CHAROEN POKPHAND FOODS
Thailand
Asia
CHEVRON CORP
United States
North America
CHINA COMMUNIC CONSTRU-H
China
Asia
CHINA HUARONG ASSET MANAGEMENT CO 
LTD
China
Asia
CHINA PETROLEUM & CHEMICAL CORP
China
Asia
CHINA RAILWAY CONSTRUCTION CORP
China
Asia
CHINA RAILWAY GROUP LTD
China
Asia
CHINA STEEL CORPORATION
Taiwan
Asia
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
46
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Highlights 2018

CHOCOLADEFABRIKEN LINDT
Switzerland
Europe 
(excl. the Netherlands)
Chubu Electric Power Company,Incorporated
Japan
Asia
CIA VALE DO RIO
United States
North America
CK HUTCHISON HOLDINGS
China
Asia
CLP HOLDINGS LTD
Hong Kong
Asia
COAL INDIA LIMITED
India
Asia
COCA-COLA CO
United States
North America
COGNIZANT TECHNOLOGY SOLUTIONS
United States
North America
COLGATE-PALMOLIVE
United States
North America
Comcast Corporation Class A
United States
North America
COMPANHIA SIDERURGICA NACIONAL
Brazil
Rest of the world
Costco Wholesale Corporation
United States
North America
CREDIT SUISSE GROUP AG
Switzerland
Europe 
(excl. the Netherlands)
CVS Health Corporation
United States
North America
DAEWOO SHIPBUILDING & MARINE 
ENGINEERING
South Korea
Asia
Daiichi Sankyo Company, Limited
Japan
Asia
DANSKE BANK
Denmark
Europe 
(excl. the Netherlands)
DASSAULT AVIATION
France
Europe 
(excl. the Netherlands)
Derwent London plc
United Kingdom
Europe 
(excl. the Netherlands)
DEUTSCHE BANK
Germany
Europe 
(excl. the Netherlands)
DEUTSCHE POST
Germany
Europe 
(excl. the Netherlands)
DEUTSCHE TELEKOM
Germany
Europe 
(excl. the Netherlands)
Dexus
Australia
Rest of the world
DGB FINANCIAL GROUP CO LTD
South Korea
Asia
DOMINION ENERGY
United States
North America
Dow Chemical Co
United States
North America
DUKE ENERGY CORP NEW COM NEW COM 
NEW
United States
North America
DXC Technology Co
United States
North America
ECOPETROL SA
Colombia
Rest of the world
EDP ENERGIAS DE PORTUGAL
Portugal
Europe 
(excl. the Netherlands)
EDP ENERGIAS DO BRASIL SA
Brazil
Rest of the world
Eisai Co., Ltd.
Japan
Asia
ELECTRICITE DE FRANCE
France
Europe 
(excl. the Netherlands)
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
47
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ELECTRICITY GENERATING NVDR
Thailand
Asia
ELETROBRAS
Brazil
Rest of the world
ENBRIDGE
Canada
North America
ENEL
Italy
Europe 
(excl. the Netherlands)
ENGIE SA
France
Europe 
(excl. the Netherlands)
ENI
Italy
Europe 
(excl. the Netherlands)
Equifax
United States
North America
EVERGREEN MARINE
Taiwan
Asia
Exxon Mobil
United States
North America
FACEBOOK
United States
North America
FAST RETAILING CO
Japan
Asia
FGV HOLDINGS BHD
Malaysia
Asia
FIAT CHRYSLER AUTOMOBILES
Netherlands
the Netherlands
FORMOSA PLASTICS CORP
Taiwan
Asia
FREEPORT MCMORAN
United States
North America
G4S
United Kingdom
Europe 
(excl. the Netherlands)
GAP
United States
North America
GENERAL ELECTRIC
United States
North America
General Mills, Inc.
United States
North America
GENERAL MOTORS
United States
North America
GERDAU PN
Brazil
Rest of the world
GGP, Inc.
United States
North America
GlaxoSmithKline plc
United Kingdom
Europe 
(excl. the Netherlands)
GLENCORE PLC
Jersey
Europe 
(excl. the Netherlands)
GLOBAL TELECOM HOLDING SAE
Egypt
Rest of the world
GOLDMAN SACHS GROUP
United States
North America
GOODYEAR TIRE & RUBBER
United States
North America
Grasim Industries
India
Asia
GRUPA AZOTY AS
Poland
Europe 
(excl. the Netherlands)
GRUPO MEXICO
Mexico
Rest of the world
GRUPO TELEVISA
United States
North America
GUANGZHOU AUTOMOBILE GROUP
China
Asia
HABIB BANK
Pakistan
Asia
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
48
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HANWHA CHEMICAL CORP
South Korea
Asia
HARMONY GOLD
South Africa
Rest of the world
HASBRO
United States
North America
HEIDELBERGCEMENT
Germany
Europe 
(excl. the Netherlands)
HENNES & MAURITZ
Sweder
Europe 
(excl. the Netherlands)
HERSHEY
United States
North America
HINDALCO
India
Asia
HON HAI PRECISION INDUSTRY CO
Taiwan
Asia
Honda Motor Co., Ltd.
Japan
Asia
HSBC HOLDINGS
United Kingdom
Europe 
(excl. the Netherlands)
HUADIAN FUXIN ENERGY CORP
China
Asia
HUGO BOSS
Germany
Europe 
(excl. the Netherlands)
HYUNDAI HEAVY INDUSTRIES CO LTD
South Korea
Asia
HYUNDAI MOTOR CO LTD
South Korea
Asia
IBERDROLA SA
Spain
Europe 
(excl. the Netherlands)
IMPALA PLATINUM HOLDINGS
South Africa
Rest of the world
INCITEC PIVOT LTD
Australia
Rest of the world
INDIAN OIL CORPORATION LIMITED
India
Asia
INDOFOOD SUKSES MAKMUR
India
Asia
INDUSTRIAL & COMMERCIAL BANK OF CHINA
China
Asia
ING Groep NV
Netherlands
the Netherlands
JASTRZEBSKA SPOLKA WEGLOWA
Poland
Europe 
(excl. the Netherlands)
JBS SA
Brazil
Rest of the world
JOHNSON & JOHNSON
United States
North America
KASIKORNBANK
Thailand
Asia
KELLOGG CO
United States
North America
KEPPEL CORP LTD
Singapore
Asia
KGHM
Poland
Europe 
(excl. the Netherlands)
KINDER MORGAN
United States
North America
KONINKLIJKE PHILIPS NV
Netherlands
the Netherlands
KOREA AEROSPACE INDUSTRIES
South Korea
Asia
KOREA ELECTRIC POWER CORPORATION
South Korea
Asia
KOREAN AIR LINES CO LTD
South Korea
Asia
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
49
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KRUNG THAI BANK LTD THB5.15   (NVDR)
Thailand
Asia
LAFARGEHOLCIM
Switzerland
Europe 
(excl. the Netherlands)
LG CHEMICAL
South Korea
Asia
LG CORP
South Korea
Asia
LG ELECTRONICS
South Korea
Asia
Liberty Global Inc. Cl A
United States
North America
LINDT & SPRUENGLI AG
Switzerland
Europe 
(excl. the Netherlands)
MARUHA NICHIRO CORP
Japan
Asia
MATTEL
United States
North America
MCDONALD'S CORP
United States
North America
McKesson Corporation
United States
North America
Medtronic plc
Ireland
Europe 
(excl. the Netherlands)
Merck & Co., Inc.
United States
North America
METALLURGICAL CORPORATION OF CHINA
China
Asia
MEXICHEM SAB DE CV
Mexico
Rest of the world
MMC NORILSK NICKEL
United States
North America
MMG LTD
Hong Kong
Asia
MONDELEZ INTERNATIONAL
United States
North America
MOTOROLA SOLUTIONS
United States
North America
Mylan N.V.
United Kingdom
Europe 
(excl. the Netherlands)
NESTLE
Switzerland
Europe 
(excl. the Netherlands)
NEWCREST MINING LTD
Australia
Rest of the world
NEWMONT MINING CORP
United States
North America
NEXT
United Kingdom
Europe 
(excl. the Netherlands)
NINTENDO CO
Japan
Asia
NISOURCE
United States
North America
Nissan Motor Co., Ltd.
Japan
Asia
NORDEA BANK
Sweder
Europe 
(excl. the Netherlands)
NORSK HYDRO
Norway
Europe 
(excl. the Netherlands)
Novartis AG
Switzerland
Europe 
(excl. the Netherlands)
NRG ENERGY
United States
North America
NTPC
India
Asia
NUTRIEN LTD
Canada
North America
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
50
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Highlights 2018

OCADO GROUP
United Kingdom
Europe 
(excl. the Netherlands)
OIL & NATURAL GAS CORP
India
Asia
OJI HOLDINGS CORPORATION
Japan
Asia
OLYMPUS CORP
Japan
Asia
Oracle
United States
North America
PANASONIC CORPORATION
Japan
Asia
PEGATRON
Taiwan
Asia
PEPSICO
United States
North America
PETROBRAS
Brazil
Rest of the world
Pfizer Inc.
United States
North America
PG&E CORP
United States
North America
PHILLIPS 66
United States
North America
PKN ORLEN
Poland
Europe 
(excl. the Netherlands)
POSCO
South Korea
Asia
POSCO DAEWOO
South Korea
Asia
PROCTER & GAMBLE CO
United States
North America
PTT PCL
Thailand
Asia
QUANTA COMPUTER
Taiwan
Asia
RATCHABURI ELECTRICITY GENERATING 
HOLDING
Thailand
Asia
RECKITT BENCKISER
United Kingdom
Europe 
(excl. the Netherlands)
RELIANCE INDUSTRIES
India
Asia
RENAULT
France
Europe 
(excl. the Netherlands)
RESTAURANT BRANDS INTL INC
Canada
North America
RHEINMETALL
Germany
Europe 
(excl. the Netherlands)
RIO TINTO
Australia
Rest of the world
ROSNEFT
Russia
Rest of the world
Royal Dutch Shell Plc Class A
Netherlands
the Netherlands
SAAB
Sweder
Europe 
(excl. the Netherlands)
SAINSBURY
United Kingdom
Europe 
(excl. the Netherlands)
SAMSUNG C&T CORP
South Korea
Asia
SAMSUNG ELECTRONICS
South Korea
Asia
SAMSUNG HEAVY INDUSTRIES
South Korea
Asia
SAMSUNG SDI
South Korea
Asia
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
51
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SANTANDER CONSUMER USA HOLDI
United States
North America
SAP SE
Germany
Europe 
(excl. the Netherlands)
SEMPRA ENERGY
United States
North America
Shionogi & Co., Ltd.
Japan
Asia
SHIRE LTD
Jersey
Europe 
(excl. the Netherlands)
SIAM COMMERCIAL BANK P-NVDR
Thailand
Asia
SIBANYE-STILLWATER
South Africa
Rest of the world
SIEMENS
Germany
Europe 
(excl. the Netherlands)
SIEMENS GAMESA RENEWABLE ENERGY SA
Spain
Europe 
(excl. the Netherlands)
SINA CORP
China
Asia
SINGAPORE TECHNOLOGIES ENGINEERING
Singapore
Asia
SINOPEC SHANGHAI PETROCHEM-H
China
Asia
SK HOLDINGS CO LTD
South Korea
Asia
SOCIEDAD QUIMICA Y MINERA DE CHILE
Chile
Rest of the world
SOUTH32 LTD
Australia
Rest of the world
SOUTHERN COPPER CORPORATION
United States
North America
STEEL AUTHORITY OF INDIA
India
Asia
STRYKER CORP
United States
North America
SUMITOMO CORP
Japan
Asia
SUMITOMO METAL MINING CO LTD
Japan
Asia
SUN HUNG KAI PROPERTIES
Hong Kong
Asia
SUZANO PAPEL E CELULOSE
Brazil
Rest of the world
T-MOBILE US
United States
North America
Taishin Financial Holdings Co., Ltd.
Taiwan
Asia
Takeda Pharmaceutical Co. Ltd.
Japan
Asia
TATA POWER COMPANY LTD
India
Asia
TATA STEEL
India
Asia
TDK CORP
Japan
Asia
Tesco PLC
United Kingdom
Europe 
(excl. the Netherlands)
TESLA INC
United States
North America
THAI UNION FROZEN PROD-NVDR
Thailand
Asia
THE PEOPLE'S INSURANCE CO
China
Asia
THYSSENKRUPP
Germany
Europe 
(excl. the Netherlands)
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
52
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Highlights 2018

TIGER BRANDS
South Africa
Rest of the world
TOKYO ELECTRIC POWER COMPANY
Japan
Asia
TOSHIBA CORP
Japan
Asia
Total SA
France
Europe 
(excl. the Netherlands)
TOYOTA MOTOR CORPORATION
Japan
Asia
TRANSCANADA CORP
Canada
North America
TURKIYE GARANTI BANKASI
Turkey
Rest of the world
TURKIYE HALK BANKASI
Turkey
Rest of the world
TWENTY FIRST CENTURY FOX INC
United States
North America
Tyson Foods, Inc. Class A
United States
North America
UNILEVER
Netherlands
the Netherlands
UNITED TECHNOLOGIES CORP
United States
North America
UPL LIMITED
India
Asia
VALE SA
Brazil
Rest of the world
VEOLIA ENVIRONNEMENT SA
France
Europe 
(excl. the Netherlands)
VISTRA ENERGY CORP
United States
North America
VOLKSWAGEN AG
Germany
Europe 
(excl. the Netherlands)
Vonovia SE
Germany
Europe 
(excl. the Netherlands)
VTB BANK
Russia
Rest of the world
WARTSILA OYJ ABP
Finland0
Europe 
(excl. the Netherlands)
Wells Fargo & Company
United States
North America
WESFARMERS
Australia
Rest of the world
WILMAR INTERNATIONAL LIMITED
Singapore
Asia
WOORI BANK
South Korea
Asia
WYNN RESORTS
United States
North America
YAHOO JAPAN CORP
Japan
Asia
ZIJIN MINING GROUP CO LTD
China
Asia
ZIMMER BIOMET HOLDINGS INC
United States
North America
ZTE CORP-H
China
Asia
Name organisation
Country 
(headquarters 
location)
Region
Good
Corporate  
Governance 
Climate Change, 
Pollution and  
Emissions
Health- 
care
Water Scarcity
Human Rights
53
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Highlights 2018

In this 2018 Annual Responsible Investment Report, we provide information 
for our clients, their participants and other interested parties on the activities 
undertaken in the field of responsible investment in 2018. Where we refer to 
clients in this report we mean both the clients participating in the PGGM 
funds and the clients for whom we manage mandates. If we state that we 
invest in a certain portfolio, we always mean that we do so on behalf of our 
clients. The information in this annual report only covers responsible investment 
activities carried out by PGGM. More extensive information on PGGM N.V. and 
PGGM Coöperatie U.A., and about sustainability at the PGGM N.V. level is 
available on PGGM’s website and in the 2018 PGGM N.V. Annual Report. This 
PGGM Annual Responsible Investment Report provides information on the 
2018 financial year running from 1 January to 31 December 2018. The report 
is a progress report and does not provide a comprehensive overview of 
activities and current investments. It is limited to the responsible investment 
activities carried out by PGGM Vermogensbeheer B.V. in 2018. 
Reporting and Transparency
We publish our Annual Responsible Investment Report every year on our 
website. We also provide quarterly reports to our clients and write online 
blogs that explain our position on specific topics. Finally, we also enable our 
clients to provide their participants and other stakeholders with annual 
information on the investment portfolio and on the parties with which we do 
business on their behalf.
Guidelines Followed
In compiling the PGGM 2018 Annual Responsible Investment Report we  
have broadly adhered to the international reporting principles of the Global 
Reporting Initiative (GRI), the GRI Standards. The GRI standards relate to  
both content choices (materiality, involvement of stakeholders, the 
sustainability context, completeness) and the quality of the reporting (balance, 
comparability, accuracy, timeliness, clarity, reliability). We did not follow the 
GRI to the letter in this report. We adhered as much as possible to the 
reporting principles specified in the GRI in compiling this annual report. The 
GRI standards do not fully apply to this annual report, because this report 
concerns asset management activities and is not relevant at the PGGM N.V. 
level. Further information on the sustainability activities at the corporate level 
can be found in the PGGM N.V. Annual Report, which fully adheres to the GRI 
reporting  guidelines. The 6 principles of the PRI were also used as a reporting 
guideline. As a signatory to the PRI, we report on our activities to the PRI each 
year. The corresponding public report is available on PRI’s website.
Selection of material subjects
We have selected the relevant subject areas on the basis of a materiality 
analysis. During the process of identifying the material subject areas we 
consulted our clients, our key stakeholders. Internally, we consulted the  
asset management organisation, as well as the client advisory organisation. 
In addition, we conducted a media analysis of our own and our auditor 
conducted an external media analysis. We assigned a higher priority to 
subject areas that received a great deal of media attention. 
In defining relevant subject areas we took external developments into 
account. The key sustainability subject areas, relevant laws and regulations 
and international agreements in each chapter form the framework, a broader 
context within which our activities take place. 
The table below contains the key material subject areas for 2018.  
We consider it essential for these subject areas to be dealt with in the  
2018 Annual Responsible Investment Report.
Material Subject Areas 2018
Climate research
Impact management project
ING
IMVB
Sustainable Development Investments (SDI)
Review
KPMG Sustainability has reviewed the PGGM 2018 Annual Responsible 
Investment Report. See the Assurance Report in Appendix 4.
	
Appendix 3 Accountability
Annual Responsible Investment Report 
54
Table of contents
Highlights 2018

Appendix 4 Assurance report of the independent auditor
To the readers of the Annual Responsible Investment Report 2018 of 
PGGM Vermogensbeheer B.V.
Our conclusion 
We have reviewed the Annual Responsible Investment Report 2018 (hereafter: 
the Report) of PGGM Vermogensbeheer B.V. (hereafter: ‘PGGM’) based in 
Zeist. A review is aimed at obtaining a limited level of assurance.
Based on our procedures performed, nothing has come to our attention that 
causes us to believe that the Report is not prepared, in all material respects, 
in accordance with the reporting criteria as included in the section ‘reporting 
criteria’. 
Basis for our conclusion 
We have performed our review on the Report in accordance with Dutch law, 
including Dutch Standard 3000A ’Assurance-opdrachten anders dan 
opdrachten tot controle of beoordeling van historische financiële informatie 
(attest-opdrachten)’ (Assurance engagements other than audits or reviews  
of historical financial information (attestation engagements)).
Our responsibilities under this standard are further described in the  
‘Our responsibilities for the review of the Report’ section of our report.
We are independent of PGGM Vermogensbeheer B.V. in accordance with  
the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-
opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation 
with respect to independence) and other relevant independence regulations  
in the Netherlands. Furthermore, we have complied with the ‘Verordening 
gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
We believe that the assurance evidence we have obtained is sufficient and 
appropriate to provide a basis for our conclusion.
Reporting criteria
The information in the Report needs to be read and understood together with 
the reporting criteria. PGGM is solely responsible for selecting and applying 
these reporting criteria, taking into account applicable law and regulations 
related to reporting.
The reporting criteria used for the preparation of the information in the Report 
are based on the principles of the Sustainability Reporting Standards of the 
Global Reporting Initiative (GRI) supplemented with internally developed 
reporting criteria.
Limitations to the scope of our review 
The Report includes prospective information such as ambitions, strategy, 
plans, expectations, estimates and risk assessments. Inherently the actual 
future results are uncertain. We do not provide any assurance on the 
assumptions and achievability of prospective information in the Report.
The references to external sources or websites in the Report are not part  
of the information itself as reviewed by us. We therefore do not provide 
assurance on this information.
Responsibilities of Management and the Supervisory Board for the Report
Management is responsible for the preparation of the Report in accordance 
with the reporting criteria as included in section ‘Appendix 3 Accountability’, 
including the identification of stakeholders and the definition of material 
matters. The choices made by Management regarding the scope of the Report 
and the reporting policy are summarized in section ‘Appendix 3 Accountability’.
Management is also responsible for such internal control as Management 
determines is necessary to enable the preparation of the Report that is free 
from material misstatement, whether due to fraud or error. 
The Supervisory Board is responsible for overseeing the reporting process  
of PGGM.
Annual Responsible Investment Report 
55
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Our responsibilities for the review of the Report 
Our objective is to plan and perform the review in a manner that allows us to 
obtain sufficient and appropriate assurance evidence for our conclusion.
Procedures performed to obtain a limited level of assurance are aimed to 
determining the plausibility of information and vary in nature and timing from, 
and are less in extent, than for a reasonable assurance engagement. The 
level of assurance obtained in review engagements with a limited level of 
assurance is therefore substantially less than the assurance obtained in audit 
engagements.
Misstatements can arise from fraud or errors and are considered material if, 
individually or in the aggregate, they could reasonably be expected to influence 
the decisions of users taken on the basis of the information in the Report. 
The materiality affects the nature, timing and extent of our review procedures 
and the evaluation of the effect of identified misstatements on our conclusion.
We apply the ‘Nadere voorschriften kwaliteitssystemen’ (NVKS, Regulations 
on quality management systems) and accordingly maintain a comprehensive 
system of quality control including documented policies and procedures 
regarding compliance with ethical requirements, professional standards and 
applicable legal and regulatory requirements.
We have exercised professional judgement and have maintained professional 
scepticism throughout the review, in accordance with the Dutch Standard 
3000A, ethical requirements and independence requirements. 
Our review engagement included, among others, the following procedures:
•	 Performing an analysis of the external environment and obtaining an 
understanding of relevant themes and issues, and the characteristics of 
the company;
•	 Evaluating the appropriateness of the reporting criteria used, their 
consistent application and related disclosures in the Report. This includes 
the evaluation of the results of the stakeholders’ dialogue and the 
reasonableness of estimates made by the Management Board;
•	 Obtaining an understanding of the reporting processes for the information, 
including obtaining a general understanding of internal control relevant to 
our review;
•	 Identifying areas in the Report with a higher risk of misleading or 
unbalanced information or material misstatements, whether due to fraud 
or error. Designing and performing further assurance procedures aimed at 
determining the plausibility of the information in the Report responsive to 
this risk analysis. These procedures included among others:
	
-	
Interviewing relevant staff at corporate level responsible for the 
responsible investment policy and results;
	
-	
Interviewing relevant staff responsible for providing the information for, 
carrying out internal control procedures on, and consolidating the data 
in the information; 
	
-	
Obtaining assurance information that the information in the Report 
reconciles with underlying records of the company;
•	 Reviewing, on a limited test basis, relevant internal and external 
documentation.
•	 Evaluating the presentation, structure and content of the Report;
	
To consider whether the information in the Report as a whole, including  
the disclosures, reflects the purpose of the reporting criteria used.
We communicate with the Management regarding, among other matters,  
the planned scope and timing of the review and significant findings that we 
identify during our review.
Amsterdam, 29 April 2019
KPMG Sustainability,
Part of KPMG Advisory N.V.
W.J. Bartels, 
Partner
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Appendix 4 Assurance report of the independent auditor
Table of contents
Highlights 2018

Disclaimer
We provide the PGGM Annual Responsible Investment Report 2018 a service 
for our client and other interested parties. Although we have taken the utmost 
care in compiling this report, we cannot guarantee the the information is 
complete and/or accurate in all cases. Nor do we guarantee that its use will 
lead to the correct analysis for specific purposes. Therefore, we can in no 
case be held liable for – among other things but not exclusively – any 
eficiencies, inaccuracies and/or ubsequent amendments. The use of this 
report is not permitted without our prior written consent, other than for the 
stated purpose for which we have compiled this report. In the event of 
discrepancies between different versions of the PGGM Annual Responsible 
Investment Report 2018, the Dutch version shall prevail.
Annual Responsible Investment Report 
57
Table of contents
Highlights 2018