Fondo Pensioni Del Personale Gruppo BNL/BNP (BNL) has enhanced its sustainability initiatives and policies over the past 12 months, including implementing a ‘better than benchmark’ approach to ESG.

To take advantage of the increased volatility of interest rates in the last two years, BNL has identified two strategies that are implemented through ETFs and make it possible to take profit from the steepening of the interest rate curve in the US.

The fund has also established a cashflow-driven investment sub-fund to ensure the pension fund can match its liabilities as they arise. This is also designed to eliminate liquidity gaps and manage counterparty, longevity and liquidity risks. The investment team periodically monitor the alignment of asset and liability flows to ensure the portfolio remains up to date. The pension fund updated its ‘life cycle’ strategy to allow members to obtain a supplementary pension equal to approximately 20% of final salary.

BNL also launched a communication initiative for members approaching retirement age, designed to support them with tailor-made proposals by launching a new web portal.

The €1.8bn Cassa Nazionale del Notariato (CNN), which provides services to 7,769 members, adapted its management policy to protect against global market uncertainty more effectively. The new approach aims to achieve maximum portfolio diversification while adopting low-risk investment strategies that provide high levels of profitability in the long-term. 

CNN has also responded to the pressing need to transition to renewable energy by investing in alternative energies. This asset class provided positive returns of 6% in just two months and improved the portfolio’s ability to hedge ESG risks.

The liquid portion of the fund’s portfolio, which accounts for 64% of total assets, is fully invested in mutual funds diversified across geographies and sectors. This section of the portfolio has been increased to improve solvency and liability matching. CNN has implemented a socially responsible investment strategy into the infrastructure sector and small caps as well as into management policies.

In the first half of 2023 the portfolio returned more than 4%, outperforming the benchmark of 3.4%. This has been achieved with a lower level of risk compared to the end of 2022.