Van Wierengen said the benchmark had not been adjusted in the wake of the exclusions.The pension fund’s equity holdings amount to 27% of the total portfolio and are passively invested through BlackRock.During the past five years, the pension fund’s overall returns had consistently outperformed the MSCI.Before 2017, the pension fund only excluded a handful of manufacturers of controversial arms. However, drawing on surveys of its members, last year it extended its exclusion policy to cover human rights, labour conditions, environmental issues and corruption.The exclusion criteria are based on the UN Global Compact Principles, which many Dutch schemes apply. The pension fund said it expected socially responsible investment would generate better returns for the long term, but made clear it would accept costs in the short-term if these were not too high.It added that it wanted to intensify its ESG approach in the coming years.Overall return of 4.8%During the past five years, the Wolters Kluwer scheme reported annual results of 7.4% on average, equivalent to an outperformance of one percentage point on average.The pension fund’s investment gained 4.8% overall in 2017, with fixed income, property and private equity generating -3.3%, -0.3% and -1.6%, respectively.Its currency hedge contributed 4.3% to the result while it lost 1.2% on its interest hedge.The scheme said it had rebalanced its securities portfolio, after the quickly rising value of its equity holdings had exceeded its 35% strategic securities allocation by three percentage points.It had subsequently reinvested the proceeds in its liability-driven investing and credit mandates. At the end of last June, the pension fund’s coverage ratio stood at 112.8%.The scheme granted its members an index-linked benefit increase – the first since 2010 – of 0.04% last January. Returns for 2017 at the €1.1bn pension fund of a Dutch publishing firm were negatively affected by the exclusion of companies from its investment universe as part of its ESG policy, the scheme said in its annual report.Last year, the Wolters Kluwer pension fund tightened its approach on environmental, social and corporate governance (ESG) matters, which included expanding its exclusions.Wolters Kluwer’s equity holdings usually perform in line with their reference portfolio, but last year’s returns fell 0.5 percentage points short of the MSCI benchmark, which returned 9.9%.“We assumed we had removed the bad apples from our portfolio, but they seemed to have performed pretty well,” said Jaap van Wieringen, chief investment officer of the pension fund.