The Versorgungsanstalt des Bundes und der Länder (VBL), the German supplementary pension fund for public sector employees, is revising its internal guidelines on asset allocation, according to a government response to a parliamentary inquiry led by the Greens .
VBL is also reassessing and developing its approach to sustainability in its asset allocation, the government added.
The pension provider will integrate sustainability risks into its asset management and risk management process when identifying and analyzing investment risks, their causes and interactions.
Sustainability risks are among the factors contributing to other types of risk, such as credit risk and market risk, VBV added.
In addition, as part of its asset-liability management, VBV will carry out at least once a year an analysis of the evolution of its investments, obligations and risk-taking capacity in order to design risk control measures, by example in the form of strategic asset allocations. in accordance with long-term obligations.
The analysis will also lay the groundwork for developing tactical allocations, VBV said, adding as an example the option to reduce investments as the market risk of an asset class increases, if regulatory action is taken. such as rising CO2 or if companies are not operating sustainably or using the funds to shift to sustainable business models.
VBL excludes investments in stocks and bonds related to serious and systematic violations of human rights or fundamental standards of the International Labor Organization (ILO).
Allocations of shares and obligations related to the manufacture or trade of cluster munitions and anti-personnel mines, as well as biological and chemical weapons are excluded in accordance with the United Nations arms ban.
The VBL also plans to exclude companies active in the energy and raw materials sectors with a business model mainly based on coal, as well as countries whose MSCI ESG score indicates serious human rights violations, a- he declared.
According to the government’s response, VBL is currently investing a total of € 368 million in companies listed on the Global Coal Exit List, a database listing companies that are part of the thermal coal value chain.
VBL has engaged with issuing companies by exercising voting rights at annual general meetings, or by holding discussions with supervisory boards, members of the board of directors of companies and investor relations or representatives. of corporate sustainability on critical sustainability issues.
VBL’s assets under management stood at € 25.7 billion in 2019 with 4.08 million members, according to the latest publicly available financial statement.