A Large Pension Fund Embracing the Systems Perspective: An Investment Case Study on PFZW and PGGM’s Journey

Abstract

This article is a case study, written from the inside, of one of the largest pension funds in the world, PFZW, from the Netherlands. It focuses on the process used to transform the company into one that takes responsibility for certain systemic risks, first and foremost climate change, and for directing long-term capital allocation toward desirable futures. The first part describes what triggered the process leading to the White Sheet of Paper project, the project setup, and its outcomes. We approached the project as a design problem rather than an optimization problem. It looks at the translation into practice now, a decade later. The second and last part focuses on the Capital Design angle of this project. What are the lessons learned from this project? What are my reflections on the approach? What does the case reveal about institutional change, sensemaking, or navigating uncertainty? Can we use the design principles in finance? Answering such questions sheds light on the use of intuitive design approaches by institutional investors. It aims to blur the borders between capital and design. Hopefully, this will lead to a couple of questions for future research in design in finance and insights relevant to practitioners.