The first relates to carbon dioxide emissions reductions. Under the second, more weight is given to companies that pay a great deal of attention to labour rights and create a working environment that is deemed healthy and safe.In concrete terms the weightings of such companies will be 10 percentage points higher in PWRI’s portfolios than in the MSCI World Index.PWRI developed this new passive equity strategy together with BMO. The two portfolios will be managed by UBS Asset Management and DWS. They will each manage a mandate of €1.5bn, which includes both developed and emerging market investments.“We deliberately opted for two asset managers and will accept the higher costs involved,” said Xander den Uyl, chair of the PWRI board. “The strategy with an emphasis on social criteria is new, so we want to see how it works out for different asset managers. They will each have their own approach in the interpretation of the mandate.”Inclusion portfolioThe two passive equity mandates are positioned within the PWRI’s liquid return portfolio. The pension scheme also runs an “inclusion portfolio” within its illiquid assets, containing 50 listed companies that have the ambition to hire people with a so-called “longer distance” to the labour market, as per a 2013 agreement between the government, employers and trade unions.The aim is for all companies to have the ‘Social Enterprise Performance Ladder’ hallmark, a quality label that is co-developed by Dutch research organisation TNO. The certificate indicates that a company meets the requirements for social entrepreneurship. In the past two-and-a-half years PWRI has entered into conversations with the 50 companies that are mentioned in their inclusion portfolio, encouraging them to request the label.According to Den Uyl, the number of companies with the quality mark is increasing, albeit too slowly as far as he is concerned.“A complicated factor is that, in order to conduct a good dialogue with a company, coordination often takes place through its HR department, and many companies are not used to this type of contact with shareholders,” he said.The composition of the inclusion portfolio has nevertheless changed little since the start in 2016. PWRI uses a buy-and-hold strategy; the pension fund does not trade actively and only makes adjustments once a year. Dutch pension fund PWRI has developed a passive equity strategy that assigns greater weight in the portfolio to companies that score well on labour rights and health and safety.The €8.7bn pension fund for disabled people working in a sheltered environment has had four equity portfolios up to now. Two of them, for Europe and emerging markets, were actively managed. The other two, for America and the Pacific, had a passive approach.The portfolios were run by various asset managers, selected by BMO Global Asset Management, which is the pension fund’s fiduciary manager.To save costs PWRI will switch to two equity portfolios that are fully passively managed: one for developed and one for emerging markets. Within these portfolios, which have a total size of €3bn, emphasis will be placed on two ESG criteria.