Stichting IKEA Pensioenfonds’ (STIP's) mission is to serve as a reliable manager of the pension scheme for IKEA Netherlands BV, Inter IKEA Systems BV and Inter IKEA Services BV. It aims to implement the pension scheme in a transparent, cost-effective manner. It communicates with its stakeholders in a clear and, above all, understandable way. The strategy specifies that STIP has a policy on socially responsible investing. This policy is based on 5 principles:

1. STIP is mindful of the quality of life in the world
STIP believes it is important to be mindful of the quality of life in the world and wants to make a contribution here by investing in governments and companies that also consider this important.

2. Responsible investing pays off in the long run
STIP believes that adopting a responsible investment approach that reduces ESG risks in both the short and long term will contribute positively to returns in the long run.

3. ESG integration contributes to better risk and return performance
ESG factors can have a material impact on long-term risk and return performance and should be integrated into the investment process.

4. Climate change poses a systemic risk
Climate change poses a systemic risk and, as investors, we need to consider the potential financial and social impact here. The fund aims to both protect the value of its investments and contribute to the quality of life of the society in which the pension is enjoyed.

5. Active share ownership is part of responsible investing
STIP believes it has a duty as an investor to be an active shareholder. This is how we can create and preserve value, both financially and for the quality of life in the world.

This financial product - the STIP pension plan - promotes environmental and/or social characteristics, but does not have a sustainable investment objective.

The reason STIP does not have a sustainable investment objective is because the main objective of the pension fund is to operate a reliable pension plan. A sustainable investment objective, according to European legislation, means that the sustainable objective must be at least as important as the financial objective. This is not consistent with the pension fund’s objective. However, the pension fund does promote ecological or social characteristics, because STIP believes it is important to be mindful of the quality of life in the world and expects that adopting a responsible investment approach contributes positively to long-term returns.

STIP considers the adverse impacts on sustainability by taking into account how the carbon intensity of the investment fund compares to the broader market when selecting new investment funds. STIP strives to select investment funds that focus on significantly reducing carbon intensity relative to the broader market. The progress made by STIP will be reported annually. Furthermore, STIP excludes investments in companies that violate the UN Global Compact, are involved in the production and/or sale of controversial weapons* and are involved in the extraction or sale of fossil fuels.

* Within the SFDR legislation, land mines, cluster munitions, chemical weapons and biological weapons are classified as controversial weapons. We aim to exclude all investments in the arms industry.

STIP has a socially responsible investment policy. We consider it important to be mindful of the quality of life in the world in which participants and retirees can (soon) enjoy a good pension, and strive to contribute to this quality of life where possible by investing in governments and companies that also consider this important. Our investment policy, including our socially responsible investment policy, is aimed at achieving these two goals.

STIP believes it is important for asset managers to look not only at the financial information when making investment decisions, but also at the environmental, human and good corporate governance aspects. We believe that adopting a responsible investment approach that reduces ESG risks in both the short and long term will contribute positively to returns in the long term without higher costs or more risk.

We do not want to invest in companies involved in the manufacture of tobacco, nuclear weapons, cluster munitions, land mines or chemical and biological weapons. We are also not interested in investing in countries/companies on the sanctions list of the EU, UN or Dutch government. This is part of the SRI policy.

The investment portfolio will be aligned with the new SRI policy over the coming years. STIP will select investment funds that are in line with the exclusions policy and take a best-in-class approach (to the extent possible), focusing on carbon reduction, among other factors. The best-in-class approach means that STIP prefers to invest in the companies that score highest in environment, social and governance criteria. STIP is also exploring how it can make a positive contribution to the following topics:
• Green energy
• Energy saving
• Sustainable forestry
• Sustainable agriculture
• Sustainable mobility, including charging infrastructure and sustainable infrastructure
• Sustainable waste disposal
• Sustainable materials, including sustainable packaging
• Circular economy
• Healthy and sustainable food
• Sustainable consumption
• Biodiversity
• Sustainable water management
• Resilient communities
• Affordable housing

Read more about our socially responsible investment policy in MVB-beleid (pdf, in Dutch).

We invest in shares, bonds and listed real estate. Spreading investments (diversification) across different categories helps to spread risk. This will improve the risk-return ratio: less risk for the same return, or more return for the same risk. The pension fund therefore looks to include sufficient diversification in all its investments. The investment policy is based on the results of the asset liability management (ALM) study. This is carried out at least once every three years. The investment policy will take into account the investment beliefs established by the board. See the statement of investment principles (pdf, Dutch) ('Verklaring beleggingsbeginselen').

E&S characteristics are part of the investment strategy as described above under 'The environmental and/or social characteristics of the financial product'.

We expect asset managers to clearly report on the remuneration received by the employees of the asset managers. The remuneration policy along with the information received on the remuneration provided will be included in the selection and evaluation process of the asset managers. Directors of STIP do not receive performance bonuses.

More information on our investment policy can be found in our Actuarial and Technical Business Memorandum (pdf, Dutch) ('ABTN') in Annex II 'Statement of Investment Principles STIP' ('Verklaring beleggingsbeginselen') and Annex IV 'Investment Policy Document' ('Beleidsdocument Beleggingen').

Shareholder engagement
STIP and its participants consider it important to include ESG aspects in long-term value creation. This means acting in a sustainable manner and making conscious decisions for the future. For this reason, STIP also wants the asset managers who invest on behalf of STIP to behave like engaged shareholders. STIP therefore expects asset managers to have a voting policy and actively use their voting rights at shareholder meetings for the companies invested in as part of the pension fund.

A list of the websites of the asset managers is included below, where further information on their policies and their implementation can be found:
• Aegon (choose Europe, NL, Professional investor)
• Northern Trust
• Columbia Threadneedle

More information on this can be found in our proxy voting and engagement policy: 'transparancy and shareholder participation' (pdf, Dutch).

STIP only works with asset managers who are signatories to the UN PRI.

STIP realises that there are limitations due to the size of the overall investment portfolio and the design of the portfolio through investment funds rather than direct investments. However, the use of investment funds does not mean that STIP cannot pursue SRI policies in its investment portfolio. The application of this policy does focus on investment funds.

STIP expects asset managers to provide full disclosure of investment fund investments upon request and to provide clear reports, including information on their progress on ESG. At least once a year, asset managers report on the extent to which they have complied with exclusions, engagement and sanctions. We ourselves aim to be transparent about the policies pursued. Each year, the board will provide insight in the annual report into as to how the (SRI) policy has been reflected in the investment portfolio. In addition, STIP publishes an overview of the portfolio investments on this website twice a year.

The socially responsible investment policy (pdf, in Dutch) ('MVB-beleid') describes the methods we use to assess, measure and monitor these environmental and/or social characteristics.

STIP uses asset manager information as source information. The methodologies used by the asset manager to collect this information are reviewed annually.

Given the size of the total investment portfolio and the design of the portfolio through investment funds, STIP uses information from the asset managers as source information. The data sources and processing of the asset managers will be reviewed annually. The proportion of data that are estimates is therefore unknown at this time.

As indicated above under ‘Methodologies for environmental or social characteristics’ and ‘Data sources and data processing’, STIP uses information provided by the asset managers. Any limitations in methodologies and data sources are unknown at this time. The limitations will also be reviewed annually.

STIP has outsourced the execution of investments to professional managers. The selection, monitoring and evaluation of the managers for the different investment classes is done through an established procedure.

The aim of the procedure is as follows:
1. The selection, monitoring and evaluation of a manager is to be well documented and done carefully and transparently
2. The manager selected is to make a positive contribution to the pension fund’s results within the defined risk frameworks.
3. The pension fund is able to manage the risks associated with outsourcing.

Part of this procedure involves conducting manager surveys. This can be done by conducting an operational due diligence (ODD) review, visiting the manager or inviting the manager to a board or investment advisory committee meeting. The main aims of the study are as follows:
a. Establishing that the manager is a sound and trustworthy party. Third-party research is used for this purpose, after which it is reviewed in the meeting with the manager.
b. Determining that there is a controlled and sound business operation including how the manager deals with risk management, compliance, information security and fraud prevention. This will be done based on the ISAE 3402 Type 2 report requested from the manager.
c. Determining that there is a cultural fit between the manager and the pension fund.

The board remains ultimately responsible for the quality of execution and for supervising the outsourced processes at all times. The board makes use of an investment adviser to coordinate, advise and implement procedures.

More information on our due diligence can be found in our Actuarial and technical business memorandum (pdf, in Dutch) ('ABTN')in Annex IV 'investment policy document' ('beleidsdocument beleggingen').

The STIP asset managers are to exercise their rights as owners of investments by voting at shareholder meetings. These votes are to be reported periodically. They are also expected to enter into dialogue with companies on topics where they still have room to improve (engagement). Asset managers should report on this periodically. The voting and engagement decisions taken by our asset managers will be reviewed annually.

The pension scheme of STIP as a whole does not have a reference benchmark as referred to in SFDR. As such, this section does not apply.