Major Dutch financial institutions, including the country’s largest pension investors, have committed to an investment agenda pivoting around the UN Sustainable Development Goals (SDGs) for 2030.
The 18-strong group* includes the asset managers for the €179bn healthcare pension fund PFZW and €372bn civil service pension scheme ABP, and insurance companies and banks.
It has developed what they call an agenda for “SDG investing (SDGI)”, based around increasing the amount of institutional and private capital allocated toward financing the SDGs.
Set out by the UN in 2015, the SDGs are goals relating to poverty, healthcare, education, climate and other societal challenges.
The group of Dutch financial institutions said $5trn (€4.7trn) to $7trn in financing is needed each year to achieve the SDGs for 2030 but that “a ‘crowding in’ of private and institutional SDG investment … is not happening at the right pace and scale yet”.
In a statement, the group said it “believes it is not only of societal importance but also in the interest of their investors and business relations to consider the largest social and environmental challenges of our time in their work and investments”.
The institutions’ stance on investing to achieve the SDGs and concrete recommendations for “SDGI action” are formulated in a report presented to the Dutch minister for foreign trade and development cooperation, Lilianne Ploumen, at a Global Impact Investing Network (GIIN) conference last week.
The government has been involved in the process leading up to this report, however, which, according to a statement, is the outcome of six months of consultation with more than 70 investors, government representatives and “expert practitioners”.
The report was also presented to Frank Elderson, executive director of the De Nederlandsche Bank (DNB), the Dutch central bank and pensions regulator; a “cross-sectoral consultation” meeting is due to take place at DNB on Wednesday.
Carolien de Bruin, chief executive at social enterprise C-Change, co-facilitator of the SDGI agenda initiative, told IPE 30 representatives from Dutch financial institutions would be involved in the meeting on Wednesday in addition to government and DNB officials.
“After the more celebratory launch at the GIIN conference last week, the meeting is about getting to action,” she said. “We will be discussing the agenda recommendations in working groups and jointly plan for the year ahead.”
The group’s SDGI Investing Agenda is about maximising investing in the Netherlands and abroad to meet the SDGs.
It calls on – “invites” – the Dutch government and DNB to take action in four priority areas alongside the finance industry, and made recommendations for each of these.
The goals for the four areas are, in the words of the consortium:
1. Catalyse significant SDG investment through the systematic deployment of blended finance instruments
2. Make SDG investment the ‘new normal’ by encouraging and enabling all Dutch retail investors to invest with impact
3. Establish an enabling SDGI data environment by stimulating the uptake of sustainability indicators and standards
4. Identify and address actual and perceived regulatory barriers and incentives to SDG investment
Recommendations to achieve the first goal include pooling institutional funds and resources to enable economies of scale and further adoption among smaller institutions like pension funds – a recommendation aimed jointly at the government and financial sector – and setting targets for SDG investing where feasible – a step for the finance industry to take of its own accord.
‘Investability’ questions
The report acknowledges questions around the “investability” of the SDGs, and that research into this is limited.
However, therein the financial institutions state that “we assert that a lot more can be done to ‘crowd in’ additional investment across asset classes and across the societal and environmental themes that are incorporated by the Sustainable Development agenda”.
The Dutch initiative can be seen as a further sign of the rise of the impact investing, or at least the alignment of finance with societal and environmental goals, among some parts of the institutional investment world.
In September, Dutch pension investors PGGM and APG were already among European investors that put their name to a commitment to increasingly align their investing with the SDGs.
Finnish pensions insurer Ilmarinen recently said it was aiming to double the volume of its direct equity investment related to solutions for sustainable development by 2020; this is focused on environmental aspects.
Also, the European Commission recently announced plans for the European Fund for Strategic Investments (EFSI) to be more orientated towards financing clean energy and other green economy projects, which has a degree of overlap with the SDGs.
The EFSI is part of an attempt to mobilise more private sector capital for investment in the EU economy – which the Commission believes it is doing.
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