Dutch pension fund SNS Reaal has completely converted its corporate bond portfolio into a green bond mandate.

The pension fund’s corporate bond portfolio is worth around €300m.

It had already invested partly in green corporate bonds and last year instructed its manager Goldman Sachs Asset Management (GSAM) to go completely green with its corporate bond portfolio.

In addition to green corporate bonds, GSAM may also invest in social corporate bonds, which are used to (re)finance social projects.

The proceeds are intended for projects with a social impact for the underprivileged, unemployed or other vulnerable groups.

SNS Reaal noted that, at the moment, there were not many social bonds available yet, but they can be an important addition to the fixed-income portfolio in the future.

The pension fund added that the greening of the corporate bond portfolio was “not as the expense of returns”.

It said that green bonds used to be more expensive than regular bonds, but that this was no longer the case.

This is due to the greater supply of green loans, and the final yield on green bonds was now as high as on regular bonds, according to the pension fund.

“This step fits in with the newly formulated ambition of Pensioenfonds SNS Reaal to be – within our capabilities – a leader in sustainable investment,” SNS Reaal Investment Committee chair, Benno Honsdrecht.

“Furthermore, we already invest at least 20 per cent of our total bond portfolio in green government bonds.

“We only invest in 'higher-rated European government bonds', from countries such as the Netherlands, Germany and France.

“The fund will soon also further green the portfolio of high yield bonds (4 per cent of the portfolio).”

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