NETHERLANDS - The majority of Dutch pension funds with sustainable investment policies in place fell short in their implementation last year, the lobbying organisation VBDO has suggested.

VBDO - which looked at the 60 largest pension funds in a joint survey with research bureau Profundo - said that although 83% of the schemes have a sustainable investment policy in place, two-thirds of them apply the rules to less than 50% of their assets.

According to the lobbying organisation, industry-wide schemes performed better than company pension funds, with the larger funds outperforming smaller ones.

It said the best scoring pension funds were the €98bn healthcare scheme PFZW, the €1.8bn pension fund of bancassurer SNS Reaal, the €216bn civil service scheme ABP, the €3bn scheme PNO Media and the €11bn railway scheme SPF.

VBDO said pension funds' SRI implementation was most effective when dealing with equities and that policy was much less successful with corporate bonds, property and alternatives, with government bonds coming bottom.

It also said transparency fell short of expectations, with only 16 schemes publishing a list of investments in one or more asset classes.

That said, Giuseppe van der Helm, VBDO's director, said he was upbeat, pointing at the fact most pension funds had adopted a policy that took "people, planet and profit into account".

He added: "As asset managers only have developed a few SRI products so far, it is a matter of time before SRI will take off for all asset classes."

Van der Helm urged pension funds to apply their policies fully and to base their voting at shareholders' meetings specifically on sustainability, further stressing the importance of engagement between the stakeholders.

VBDO has been following the developments on SRI during the past four years and said the percentage of pension funds introducing a policy had increased from less than 50% to 83% during this period.

Harry Hummels, professor of SRI at Maastricht University, attributed the differences in SRI uptake for the various asset classes to the markets.

"Pension funds first picked the low-hanging fruit of equity," he said, predicting that credit would be the next target for SRI policy, followed by property.

In his opinion, applying SRI rules for government bonds is difficult because "investors will ignore this asset class anyway for countries they don't want to invest in".

He added: "The implementation of SRI requires time, and the boards of pension funds and their providers have been under a lot of pressure recently because of low coverage ratios."