British boutique asset management firm Osmosis has secured a contract to manage a $4.5bn sustainable investment strategy for Pensioenfonds PGB, a Dutch state pension fund, reported The Financial Times (FT).

The strategy has been designed to invest in firms that offer improved outcome on various parameters such as carbon emissions, water consumption and waste production.

It also intends to provide environmental aids and greater returns than the ones fixed by MSCI World index.

According to Osmosis CEO and co-founder Ben Dear investors do not have to compromise on financial gains in order to comply with goals to reduce emissions and other targets related to environment in their portfolios.

Dear was quoted by the publication as saying: “The mandate will target better risk-adjusted returns by investing in resource-efficient companies [that] will also deliver an immediate reduction of more than 50% in carbon emissions, water consumption and waste creation relative to the Pensioenfonds PGB current equity portfolio.”

The latest mandate almost doubles Osmosis’ assets under management to $9bn.

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The firm has been operating similar environmental, social, and governance (ESG) strategies on behalf of Oxford university’s endowment fund, Australia’s Commonwealth Superannuation as well as Danish pension fund PKA and Imas foundation.

Structure of the new order is like Osmosis’ flagship $730m Resource Efficient Core Equity fund, with the eliminations of some companies as suggested by Pensioenfonds PGB.

The pension fund noted that its freshly awarded contract is part of its new climate action plan.

Approved in December 2022, the plan aims to reduce carbon emissions by half across its listed equity portfolio by 2030.