Osmosis Investment Management has won a €4.2 billion global equity mandate from Pensioenfonds PGB, one of Holland’s largest state pension funds, which will focus on carbon reduction and other sustainability factors.
The agreement is for Osmosis Investment Management to run green investment strategies for Pensioenfonds PGB, which has €28.8 billion in AUM, and involves a bespoke portfolio based on Osmosis’s flagship €683 million Resource Efficient Core Equity Fund.
Osmosis has worked with Pensioenfonds PGB to create a developed markets world equity portfolio, which will incorporate PGB’s exclusions while integrating the proprietary Osmosis Resource Efficiency Factor. This focuses on carbon emissions, water consumption and waste generation as core metrics for 13 years and leads to immediate carbon, water, and waste ownership reductions in excess of 50% relative to the current portfolio.
On a sector-relative basis, the strategy overweights companies it identifies as resource efficient.
“It is important the asset management industry continues building innovative solutions to help investors transition their capital,” said Ben Dear, CEO and founding partner of Osmosis. “Only through partnerships with forward-thinking investors like PGB will we stand a chance of reaching any of the goals set at Paris, Glasgow, or Sharm El-Sheikh.”
The firm’s experience in ESG investment research has led it to become outspoken against recent regulations in this field. Earlier this month, Osmosis warned that estimating Scope 3 emissions could create portfolios biased towards low-revenue companies.
Based on its own research, Osmosis found this approach could lead to portfolios with unappealing investment characteristics that are “irresponsible” on financial and environmental grounds. Therefore, Osmosis – which currently manages over €8.4 billion in sustainable assets – advocates for a more granular approach with research.
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