Introduction
In this first CSR Annual Review 2008–2009, we set out APG’s corporate social responsibility policy. Starting from the formation of APG, we report on our activities in 2008 and 2009. In the future, our CSR reporting cycle will coincide with our annual reporting cycle. This CSR Annual Review complies with the guidelines for sustainability reporting of the Global Reporting Initiative (GRI). Detailed information on the performance indicators used by the GRI guidelines can be found at www.apg.nl. Verification
APG aims to provide the most accurate possible account of its CSR activities. In 2010 we are considering how best we can have this information verified at an acceptable cost by an independent expert. Your views
APG is still developing its CSR policy. An exchange of views with our stakeholders is an essential element in this process and we welcome your suggestions and ideas on CSR. Please e-mail your message to [email protected] or direct to Ernst Peters, CSR Manager, at ernst.peters@ apg.nl.
APG CSR annual review 2008 – 2009
Foreword 4 Profile 6
Our vision of CSR 8
Social aspects of APG’s operations 10
Environmental aspects of APG’s operations 12 Responsible investment 13
APG, now in its third year, bears a heavy responsibility. We manage large sums for our client pension funds and we are important to millions of people in building pension capital, paying their pensions and providing supplementary insurance. And we are at the heart of the public debate on pension funds and their investment policy. We render account for our policy and its implementation in particular in our Annual Report and Responsible Investment Report.
APG is not only a large investor: it is an organisation of 4,000 people who do their best for the customers and maintain high ethical standards. This latter aspect is the theme of this CSR Annual Review. We show that we apply the same standards to our own operations as we impose on our own suppliers and that those standards guide our investment policy.
This printed version of our CSR Annual Review covers a number of main issues. The online version provides the specific information required by the GRI Guidelines, some of it specially gathered for this CSR Annual Review. In this way we hope to strike the right balance between readability and completeness, while avoiding unnecessary paper usage. Building on the experience gained with this first report, we are aiming to integrate the CSR Annual Review with the Annual Report and the Responsible Investment Report in the coming years.
The themes addressed by CSR, such as climate change and economic order, are themes that lend themselves to large-scale debate. We shall confine ourselves in this Annual Review to a factual report on our activities. While some of the steps we have taken have been large, most have been small. But isn’t every journey – however long – taken one step at a time?
Dick Sluimers
Chairman of the Board of Directors of APG Group
We shall seek to minimise our environmental footprint, for
example by reducing environmental impact, energy use and
CO2 emissions to the lowest possible level and adopting
100% clean processes wherever feasible.
Profi le
pension products on an individual or grouped basis in connection with collective pension schemes. By offering a comprehensive range of services, APG aims to provide pension funds, affiliated employers, contributing pension fund participants and pension recipients with an optimum standard of service.
APG’s activities currently focus on the public sector and education, construction and housing associations, and are also available to companies in the brick industry, bitumen/ asphalt, cleaning and the wholesale trade in flowers and plants. On an international level, the first step has been taken with the signing of a contract with Pensplan, an Italian pension administrator on behalf of which APG is now performing some of the asset management. APG Group has three subsidiaries: APG, Cordares and Loyalis. APG, a 98% subsidiary of APG Group, specialises in the administration of collective pension schemes in the public sector and related asset management. Cordares Holding N.V., a 51% subsidiary of APG Group, specialises in the administration of mandatory group pension schemes and industry-wide schemes in the private sector. Loyalis, a 90% APG Group subsidiary, specialises in supplementary income protection arrangements on an individual and grouped basis for employers and employees in the sectors and funds affiliated with APG. These arrangements are tied in with the group pension schemes in these sectors. APG Group has one shareholder: Stichting Pensioenfonds ABP. APG Group also has shareholders and depositary receipt holders at operating company level, in the form of Stichting Sociaal Fonds Bouwnijverheid and Stichting Pensioenfonds voor de Woningcorporaties.
APG Group has a number of indirect equity investments. Full details of the structure are given in the list of equity investments included in the notes to the financial statements.
APG aims to provide as many people as possible with good and affordable pensions by charging reasonable fees for it’s services.
APG and its clients believe in a strong Dutch pension system based on principles of collectivity and solidarity. APG is committed to supporting this system with its knowledge and expertise on a permanent basis, with the object of enabling good and affordable collective/ group pensions for current and future generations. APG contributes to the positive development of the pension system by closely monitoring costs and revenues, by actively sharing our legal, financial and tax expertise and by striving constantly to improve.
APG is committed to serving civil society. We constantly adapt our organisation and operations with the ultimate aim of achieving the best solutions for people and for the environment. We believe that, by having due regard for the world at large, we can help to ensure that future generations have a good life in a sustainable world. APG Groep NV (APG Group), which was formed on 29 February 2008, has its roots in the pension world. The group has offices in Heerlen, Amsterdam, New York and Hong Kong and manages pension assets of approximately €240 billion for some 3.8 million participants (year-end 2009). It employs around 4,200 people worldwide. The APG logo, a stylised tree of life, represents the three stages of life: life before starting work, working life and life in retirement. APG’s motto is ‘Tomorrow is today’, by which we mean to emphasise that today’s pension choices are what determine future pensions. The earlier future needs are recognised and provided for, the better the outcome for scheme members will be.
APG provides customised pension administration and asset management services for pension funds. APG also offers income protection and supplementary
Key fi gures
(in € million)
APG’s performance is analysed below in terms of a number of GRI indicators. A list of all the indicators can be found at www.apg.nl in the CSR Annual Review in a separate annex.
Year-end 2009 Year-end 2008
Group equity 835 788
Balance sheet total 4,682 4,482
Ratio of shareholders’ equity to balance sheet total 45% 45% for the pension administration operations
Investments of the insurance operations 2,974 2,790 (including reinsurance receivables)
Liabilities of the insurance operations 2,931 2,758 Solvency ratio of the insurance operations 234% 242% Investments in property, plant and equipment 21 8
Number of staff 4,237 4,1021 2009 2008 Jan–Dec Mar–Dec Operating result 162 –106 Revenue - pension administration 254 176 - asset management 336 258 - supplementary products 446 546 - other 72 66 1,108 1,046 - investment returns 234 –163 1,342 883
Our vision of CSR
As a pension administrator, it is in our nature to take the long-term view: we are working to secure the future of the current generation of participants in the client pension funds. For us, ‘sustainability’ means also having regard to the needs of future generations. To help make sustainability the guiding principle in our actions, we have adopted the ten partner principles formulated by MVO Nederland (CSR Netherlands).
1. In all business decisions we shall seek the right balance between people, planet and profit.
2. We shall seek to minimise our environmental footprint, for example by reducing environmental impact, energy use and CO2 emissions to the lowest
possible level and adopting 100% clean processes wherever feasible.
3. We shall promote the vitality, employability and development of our employees.
4. We shall seek diversity in the composition of our workforce, in terms of gender, origin, culture and age. 5. We shall create opportunities for groups who have
problems finding employment.
6. When buying products and services, we shall closely monitor the social and environmental aspects that are relevant to production, transport and use and shall agree conditions on these aspects with our suppliers and customers.
7. We shall seek constantly for new opportunities in the area of sustainable products and services.
8. We are open to cooperation and partnerships and we are willing actively to share our expertise and experience.
9. We shall contribute to the quality of life in the place or region in which we are established.
10. We shall periodically formulate new CSR objectives, we shall provide clear and honest information on our progress and we are willing to discuss these aspects with interested parties.
APG’s CSR focus is currently on the implementation of ESG factors as an integral part of investment policy, with a view to maximising the sustainability of APG’s investments (see section 5).
APG has also taken steps to ensure that environmental policy as it relates to its own operations is correctly applied and that the policy objectives are being achieved. Corporate Facility Management, which is responsible for this area, measures the environmental parameters on a monthly basis and reports regularly on performance.
APG is committed to its social role and aspires to being a good example to parties with which it has a direct relationship. In the procurement process, it fulfils its supply-chain responsibility by requiring both suppliers and their products and services to comply with specific standards in terms of human rights, the environment and society. These requirements are set out in a Code of Conduct for Suppliers, which we have been requiring our suppliers to sign since November 2008.
APG is working to raise awareness among its employees of the importance of sustainability and CSR. Related activities are organised on a regular basis and a special CSR bulletin is published periodically. APG expects all employees to take account of CSR aspects in their work and encourages active engagement, for example by regularly – and successfully – calling on them to submit suggestions for improvement to the CSR Manager.
With the introduction of codes of conduct for our
employees and suppliers, our environmental management system and our responsible investment policy – which is reviewed annually by our largest client – APG’s principal CSR activities are secured.
To safeguard the continuity of the services during
the integration process, high priority has been given
to ensuring the effi cient and eff ective deployment of
the staff and their personal development.
Social aspects of APG’s operations
In 2009, we worked on the complex task of integrating the organisations and operating processes of the companies within APG Group, with the objective of ensuring that we continue to provide professional services of high quality. This phased integration exercise is based on the principle that people should move with the work but each individual’s situation should be respected as far as possible. The merger of APG, Loyalis and Cordares has also prompted the harmonisation of the conditions of employment and a start was made in 2009 on a meticulous process designed to achieve that end. The existing collective labour agreements for APG, Loyalis and Cordares were extended from 1 April 2009 to 1 April 2011.
The integration of APG, Loyalis and Cordares has changed the internal co-determination structure. A provisional joint staff council has been set up to promote the interests of all the employees of the various operating companies. In 2009, this body dealt with matters affecting APG, Loyalis and Cordares while the existing APG, Loyalis and Cordares staff councils considered matters affecting their operating companies.
To safeguard the continuity of the services during the integration process, high priority has been given to ensuring the efficient and effective deployment of the staff and their personal development. One of the tools used is qualitative and quantitative personnel planning, which entails an annual assessment of the number and quality of staff available and the number and quality required. A start was made in 2009 on further upgrading of the existing staff and the recruitment of new staff of HBO (higher professional education) and graduate level.
Sickness absence at APG Group has remained low, averaging 3.6% in 2008 and 3.4% in 2009.The staff restaurants are increasingly promoting healthy eating. In Heerlen, for example, a vegetarian week was organised in
April 2009 to raise interest in this type of diet. When the head office in Heerlen was renovated, a central location was chosen for the Staff Centre, which supports the development of the staff’s expertise and skills and which will become the home of De Linde, the staff association, in 2010. Work started in 2009 on the construction of a fitness centre close to the Heerlen head office which is scheduled for completion in 2010. As well as aiding the recovery of sick and injured staff, the centre will also provide facilities for other employees to improve their physical fitness. In 2009, APG signed the ‘Talent to the Top’ charter, which seeks to facilitate the promotion of female talent to senior posts and help raise the performance of the Netherlands in this area closer to the international benchmark. With the signature of this charter, APG Group has joined a growing list of companies striving to promote and retain women in senior positions. With women in an average of 7% of senior management posts in 2009, APG still has a long way to go. The target is 12% in 2014.
That the human resource approach adopted by APG Group is working is evident from the number of awards and honourable mentions received in 2009:
‘Top Dutch Employer 2009’, for helping young talent to make the right choice of employer.
‘Top ICT Employer’, awarded by the Corporate Research Foundation (CRF), a specialist in international research into terms of employment and training and development opportunities. Companies that satisfy the rigorous selection criteria are allowed to use this exclusive quality mark on the labour market for one year. Research shows that young, highly trained professionals in particular consider this quality mark a useful aid in choosing a future employer.
The pensions front office at Cordares has been awarded an ITO certificate for its telephone services, making it the first customer contact centre of a pensions-related company in the Netherlands to be given this certification.
APG Investments US has been named one of the twenty best employers in New York in the medium-sized to large company category. This places the US arm of APG Group near the top of the list of the some 12,000 companies that were reviewed by the Business Council of New York State and the Society for Human Resource Management. Loyalis is among the top three highest-rated life insurers in the Netherlands, according to a recent customer satisfaction survey by independent comparison website Independer.nl.
APG funds several professorships, research projects and other scientific endeavours at various universities and small-scale civil-society activities in the region, such as: Netspar, a national network for research and education relating to pensions, ageing and retirement;
the Extraordinary Professorship in Public-Sector Labour Relations (Albeda Professorship) at Leiden University; Extraordinary Professorships at the Universities of Amsterdam (UvA), Maastricht (UM) and Heerlen (OU).
Environmental aspects of APG’s operations
storage and removal of waste from all the APG offices in the Netherlands, i.e. the Basisweg and Zuidas offices in Amsterdam as well as the head office in Heerlen.
Only ‘green’ electricity and gas are used at APG’s head office in Heerlen and the Zuidas office in Amsterdam. In the case of gas, ‘green’ means that consumption is covered by carbon offsets. Electricity is supplied from hydroelectric stations. When the current energy contract for the Basisweg office in Amsterdam expires in 2012, that office can also switch to ‘green’ gas and electricity.
As a result of the renovation project, overall energy consumption at the Heerlen head office is 48% lower compared with 2005. In December 2009, SenterNovem awarded a subsidy for the CO2 reduction that had been
achieved by the renovation. The WTC Schiphol office was relocated to the Zuidas office in Amsterdam in 2009. Its new accommodation is significantly more energy-efficient. Air travel throughout 2009 was covered by carbon offset via Groenbalans BV, in accordance with the Voluntary Carbon Standard.
The proportion of FSC-certified printed material and paper reached 100% in 2009. A significant saving of natural resources was achieved by reducing the weight of copier paper from 80g/m to 75g/m . The house-style standards for presentations and other materials have also been revised to minimise toner usage.
In the agreement signed with Vebego, the cleaning contractor for all APG’s offices, the cleaning frequency has been halved and ecologically safe cleaning materials are to be used wherever possible.
Close attention has been paid in the past period to the environmental aspects of our own operations.
After evaluation and approval by Lloyd’s Register Quality Assurance, the environmental management system operated by APG’s Corporate Facility Management was granted accreditation to the ISO 14001:2004 environmental management standard on 16 January 2009. This accreditation was reconfirmed by Lloyd’s in December 2009, together with the general ISO 001:2000 accreditation. The environmental management system is applied in the operation of buildings and installations, land, catering, cleaning, safety, document production, procurement and logistics at APG’s head office in Heerlen. SITA, the company that processes APG’s waste, conducted a carbon audit in February 2009. Using a calculation model developed by CE Delft and data from SenterNovem and other sources, SITA calculated the CO2 emissions from
processing APG’s waste. It found that, since 1990 (the year of the Kyoto protocol), savings of 1,167 tonnes of CO2 per
year had been achieved, qualifying APG for the award of SITA-Nederland’s CO2 certification.
On 22 December 2009, APG signed up for the SITA Green Label Premium scheme, under which 100% of the CO2
released by the collection and processing of the company’s waste is offset. Through the Green Label Premium scheme, APG is supporting the work of the Climate Neutral Group, which finances certified sustainable energy projects, and CARE Nederland, which helps population groups at risk from natural disasters and other effects of climate change. On 1 November 2009, a contract was signed between SITA and APG for the efficient and ecologically safe
Responsible investment
oil) and producing biofuels in Brazil and a private equity fund that invests in private-sector health care companies in Sub-Saharan Africa. Substantial new commitments have been made to microfinance and APG has invested via new projects in investment funds specialising exclusively in sustainable solutions or general infrastructure funds, such as the Ampere Equity Fund (wind and solar power) and FE Clean Energy (infrastructure projects for clean, renewable energy in the emerging markets).
APG operates an exclusions policy on behalf of its clients. We do not invest in companies that are directly involved in the production of antipersonnel mines, cluster bombs, chemical or biological weapons or nuclear weapons in contravention of the Nuclear Non-Proliferation Treaty. Lists of companies excluded on the basis of this policy can be found at the clients’ websites.
APG Asset Management has a team of eight people working full-time on environmental, social and governance issues (ESG for short). These specialists work with the portfolio managers in all asset classes to understand the investment implications of ESG and identify opportunities for financially attractive investment in companies achieving superior ESG performance. They engage directly with companies on behalf of the clients and use the clients’ influence to help those companies improve their ESG performance. They also look for investment opportunities that offer a direct solution to significant social issues and environmental problems such as poverty and climate change.
New instruments were developed to analyse the most significant issues in each sector. Analysis of social and environmental issues was integrated last year into all new illiquid investments, external equities and fixed-income mandates. APG required external parties to adopt specific ESG standards, including those of the Roundtable on Sustainable Biofuels, the Round Table on Responsible Soy and the Environmental and Social Performance Standards of the International Finance Corporation (part of the World Bank).
In the year of the UN climate conference in Copenhagen, we and other investors around the world called for a decisive international approach to tackling climate change. APG was actively involved in drafting and promoting a declaration by 190 institutional investors, with combined assets under management of USD 13,000 billion.
Activities have been initiated in two important areas: sustainability in real estate and ESG in Asia. APG also focused in 2008 and 2009 on sustainable investment projects. Recent examples include investments in a new company growing jatropha (the seeds of which yield an
APG’s CSR focus is currently on the implementation
of ESG factors as an integral part of investment policy,
with a view to maximising the sustainability of APG’s
investments.
APG expects the companies in which it invests on behalf of clients to respect the principles of the UN Global Compact. If a company is suspected of violating these principles, APG will enter into dialogue with the company. If engagement does not have the desired effect and the company
continues to contravene the Global Compact standards, we may decide to dispose of our interest in the company. In 2009, ABP entered into dialogue with 18 companies which were contravening the principles of the Global Compact and discussions were held with a further 58 companies on their sustainability performance.
APG also acts for clients in the area of corporate
governance. APG exercises the voting rights attaching to shares to exert influence on matters such as appointments, remuneration policy and sustainability policy. The voting policy can be found at www.apg.nl. Where possible, we attend shareholder meetings and engage with company managements. On behalf of its clients, APG plays an active part in discussions, consultations and policy preparation at national and international level and ensures that client pension funds receive maximum compensation for any losses sustained on their investment as a consequence, for example, of fraud at the company in which they have invested.
For more information, see our Responsible Investment Report 2009.
