We do not define separate criteria for investing pension assets. Instead, we are guided by the will of the Swiss electorate, expressed in the results of federal popular votes, procedural requests forwarded by parliament, the Swiss Constitution and the concepts derived from it. We also adhere to the international conventions ratified by Switzerland, which largely coincide with the ten principles of the UN Global Compact. We refer to this as the normative basis.
When investing, we favour dialogue over exclusion
We take our responsibilities as a shareholder seriously, which means exercising our voting rights and seeking dialogue with companies that commit systematic or serious violations of PUBLICA’s normative basis. We screen the portfolio once a year to identify such companies. The dialogue, which aims to persuade them to improve their conduct, is carried out on our behalf by external partners. If a company is unwilling to change its conduct, or is unable to because of the business it is involved in, we sell our shares or investments in it.
We exclude the following from our portfolios because they violate the normative basis or present too much of a risk:
- manufacturers of controversial weapons (anti-personnel mines, cluster munitions and nuclear weapons)
- companies with which an extended dialogue has proved fruitless or with which no dialogue was possible
- companies that produce coal or generate electricity from coal, with the exception of companies with which PUBLICA is engaging in dialogue or that have a credible coal exit plan in place.
In terms of private infrastructure bonds, we invest in renewables such as wind farms, photovoltaic installations, social housing and medical research centres. These are our positive criteria for investing in securities.
We carry out a risk analysis every year. In some cases, it is difficult to estimate what impact certain risks will have on pension assets if they materialise. The analysis aims to identify and prioritise them. We then act on the results and take steps to minimise these risks. In December 2019, for example, the Investment Committee decided to introduce a climate-efficient equity index for all the portfolios. This is an effective steering tool that allows us to underweight investments in companies with a negative exposure, and overweight those in companies that are better prepared for climate risks or are actually reducing greenhouse gas emissions. We buy more shares in companies which have registered patents for processes and products that reduce greenhouse gases or promote renewable energies or energy storage technologies.
We invest part of our pension capital in real estate. Three quarters of all our properties were built after 2000. Our focus in terms of real estate is on economic and environmental sustainability. We have defined a path for reducing CO2 emissions, which we achieve by replacing heating systems that use fossil fuels such as oil with alternatives such as district heating or heat pumps, insulating the building envelope and supporting renewable energies such as solar panels. We ensure that indigenous plants grow in the properties’ gardens and make tenants aware of the need to conserve natural resources.