APG develops ESG indexes

A new set of responsible investing indexes, developed by APG and Qontigo, allow investors to measure and report on the impact on risk and return of individual ESG criteria.

There is a set of five customized indexes – iSTOXX APG World-X Index, iSTOXX APG World Responsible Index, iSTOXX APG World Responsible Low-Carbon Index, iSTOXX APG World Responsible SDI Index and iSTOXX APG World Responsible Low-Carbon SDI Index.

The iSTOXX APG World Responsible Low-Carbon SDI Index will be used for a Sustainable Development Investments (SDI) developed markets mandate managed by APG in collaboration with BlackRock, with an initial investment of approximately EUR 1 billion.

The indices were built using APG’s data sets, including one derived from the Sustainable Development Investments Asset Owner Platform (SDI AOP) representing investors managing over EUR 1.1 trillion including PGGM, British Columbia Investment Management and AustralianSuper.

The platform uses the definitions and taxonomy defined by the asset owners, which feeds into Entis, the technology platform, which turns those rules and methodology into classifications for 8,000 companies. The standard in the underlying data gets distributed by Qontigo and is available for asset owners to use, like other data services.

Founded in 2019, this platform is open to any institutional investor globally and aims to help accelerate investment aligned with the UN Sustainable Development Goals (SDGs) by providing common definitions, taxonomy and high-quality data sources. It is the first time that the SDI AOP data are used to build investable indices.

The indices will initially be used for an SDI mandate managed by APG for two existing APG clients who aim to double their investments in the SDGs by 2025.
Core to the objective is the SDI and Carbon Reduction Pathway – APG’s plan to reduce the carbon footprint of its investments and to align with its 2025 sustainable investment targets.

The APG Fund for Joint Account is based on the iSTOXX APG World Responsible Low-Carbon SDI Index and the investment portfolio is managed by BlackRock on a day-to-day basis. In addition to these indices, investors have complete flexibility to opt for a tailor-made index that aligns with their own responsible investment strategy