The pension fund is convinced that the ESG integration in a holistic view of the issue of sustainability best meets the needs of the insured and corresponds to the fiduciary duty of care in accordance with the legal requirements.

The systematic inclusion of ESG criteria in the investment process identifies opportunities and risks associated with these criteria. The procedure is recorded as part of the regular implementation concept for each asset class and includes at least the following points:

• Procedure for complying with the existing requirements of the sustainability strategy
• Description of the asset manager's approach to integrating ESG information and factors into investment decisions
• Definition of the material ESG risks within the mandate and described how they were managed
• Identify opportunities for reporting ESG related information within the mandate

The pension fund is convinced that global climate change is a relevant issue for our insured and their investments and that it must be actively taken into account. The sustainability and climate strategy developed by the pension fund includes the following two central climate-related purposes:

1. Transparency:

The aim of the pension fund is to show the insured and other stakeholders how the issue of climate change is being dealt with. To this end, there is transparent reporting on the risks and opportunities of climate change and climate protection for the pension fund and on the effects of climate change in relation to investment behavior on society and the environment.

2. Guidelines for measures:

The sustainability and climate strategy serves as a basis for the development and timely implementation of climate-related measures. The aim is to show how the pension fund positions itself on the subject of climate change and protection. A step-by-step approach is planned towards a balanced integration of climate risks and the climate impact, as far as this is possible, taking into account the effects on the yield and risk characteristics of the investments. This thoughtful and step-by-step introduction ensures that all measures planned and implemented by us also achieve the desired effect.

Objective

Our pension fund aims to minimize the CO2 emissions of its direct real estate investments (reducing them to net zero where technologically possible) by 2050 while factoring in economic objectives. This objective is in line with our pension fund's strategic goal of establishing the Paris climate targets as guidelines in the investment of its assets. In addition to achieving this targeted reduction, the real estate team also monitors the climate risks (flooding, landslides, earthquakes, etc.) and incorporates these into its long-term renovation strategy.

Implementation

In order to achieve this reduction, our pension fund is systematically increasing the proportion of renewable energy sources in the portfolio and integrating this objective into its long-term renovation planning. Our pension fund has been performing long-term renovation planning for many years now; all measures are implemented taking account of the specific location and building characteristics of the respective property.

Incorporating our climate goals into the renovation planning means that, in the event of gut renovations, we look at the replacement of fossil fuel heating sources and choose the most sustainable solution for each building. This enables us to ensure that measures are considered holistically and implemented at the best possible time. To keep the carbon footprint of our properties low throughout their life cycle, it is essential for any work done to the building's structure to be targeted and long lasting so that the biggest cause of CO2 emissions – in the form of gray energy – can be optimized.

Measurement

In order to measure the progress of target achievement, the pension fund participates in the PACTA study of the Federal Office for the environment and also measures the energy efficiency class of its real estate portfolio. In particular, the PACTA study provides us with valuable insights into whether the already implemented and planned measures are effective and whether the CO2 emissions in the portfolio have been reduced.