Bonus Eyes Climate Risks With Fresh Investment Approach

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Austria’s €1.5bn Bonus Pensionskasse is setting up a fund-of-funds structure to enhance the efficiency of its investment process.

The multi-employer pension fund will get a better overview of the climate-related risks in its portfolio as a result, according to CIO Claudio Gligo.

“We are in the final stage of a selection process for a provider of a fund-of-funds vehicle to give us comprehensive information on climate risks in all our equity exposure,” Gligo told IPE.

The name of the asset manager has not been disclosed.

“For us climate risks are particularly important for company assessments as they are hard economic factors that must be included in a holistic financial analysis,” Gligo said.

He added that, with more regulatory updates including climate-risk assessment provisions, companies not addressing such risks might “end up as stranded assets”.

Climate-risk assessments were also mentioned in a recent update to the Austrian law governing pension funds, the PKG, which came into effect last year.

“This is one of the reasons why we are focusing on climate data analysis in our portfolio, but for us social and governance factors are also very important,” Gligo said.

Fixed income plans

Claudio Gligo, Bonus Pensionskasse

Claudio Gligo, CIO, Bonus Pensionskasse

Once the new data had been collated, Bonus could then choose to make changes to its asset allocation within the fund-of-funds structure or start an engagement process with companies held via retail funds, the CIO said.

Bonus aimed to repeat the same exercise for its corporate bond and government bond holdings Gligo said. Eventually the approach could be copied for the €1.1bn Bonus Vorsorgekasse.

The group signed the Principles for Responsible Investment at the beginning of this year, which proved to be a “surprisingly extensive but also very interesting” exercise in data collection, the CIO said. “I like the network you are joining by signing the PRI and the new ideas you can get from it,” he added.

With more climate data analysis available Bonus is considering signing the Montreal Carbon Pledge, which will involve the annual public disclosure of the carbon footprint of its investment portfolio.

“In any case, we will start to report on our climate-related risks and opportunities more in the future – also to our clients,” Gligo said.

He added that Bonus did not want to rush into adopting an ESG strategy, but instead take small steps “that are profound, grounded and can be documented. We are not interested in producing short-lived marketing headlines”.

The group was also looking into impact investing ideas such as affordable housing, and it was looking to “expand governance topics” such as “working on an engagement policy”, he said.

“It is important to understand how well a company is actually implementing a sustainable strategy and how far along the value-creation chain it has an impact,” Gligo emphasised.

Victoria Volksbanken

Gligo said Bonus was able to focus on implementing comprehensive ESG strategies having successfully integrated Victoria Volksbanken’s pension funds.

“We have finalised the merger this year for both the Pensionskasse as well as the Vorsorgekasse,” he said. “Joining the two different IT systems used for membership data proved to be the most difficult step.”

In January 2016, the Bonus Group cleared the final regulatory hurdles to take on the €660m Victoria Volksbanken Pensionskasse and the €224m Victoria Volksbanken Vorsorgekasse. 

Gligo, who previously held various positions at Volksbanken Group and Union Investment, joined Bonus in November 2017 to help integrate the newly merged portfolios and asset management approaches.