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Dutch schemes fine-tune ESG investments following member feedback

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Dutch pension funds are using feedback from members to fine-tune their sustainable investment policies, according to research by IPE’s Dutch sister publication Pensioen Pro.

Schemes including the multi-sector fund PGB, the pension fund for the retail sector (Detailhandel) and the fund for the hospitality industry (Horeca & Catering) had all made divestments and impact investments after surveying their members, Pensioen Pro found.

PGB excluded tobacco firms and companies selling firearms to civilians from its investment universe, based on the opinion of its members.

The €26.2bn multi-industry scheme said it would also divest from companies involved in coal mining and coal-based energy generation.

In addition, PGB said it had withdrawn its voting mandate from asset managers “because several US managers consistently voted in favour of high remuneration”.

It has outsourced its voting policy to BMO “which takes our social wishes into account better”.

Jacqueline van Voorthuizen, portfolio manager at PGB, highlighted that the scheme’s focus on the UN’s Sustainable Development Goals (SDGs) extended its investment universe, rather than limiting it, “as non-listed companies would qualify for investments as well”.

Global Compact Principles and the SDGs

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Pensioen Pro asked three sector schemes about engagement with members

The €9.9bn Horeca & Catering scheme excluded companies that violated the UN’s Global Compact Principles, after its participants had indicated that labour conditions, environment, fraud and corruption mattered the most to them.

Jeroen Wahlen, portfolio manager at the scheme, said he didn’t expect the survey to lead to additional exclusions immediately. However, he indicated that the scheme aimed to reduce carbon emissions from its investment portfolio by 20% by 2020, as a result of the member consultation.

The hospitality scheme also planned to increase its investments in firms contributing to achieving the SDGs, targeting a 4% allocation by 2023.

Although the SDG related to health and wellbeing scored the highest among its participants, in the scheme’s opinion climate action and responsible consumption and production better matched the sector, and were also easier to translate into appropriate investments.

Pensioenfonds Detailhandel said it had also fine-tuned its investment through reference to the SDGs.

Henk Groot, head of investments, said it had extended its policy by also taking responsible consumption and production into account, in addition to climate action, good working practices, economic growth, peace, justice and strong public services.

Member surveys

PGB conducts an annual survey into responsible investment among its participants, but said it had based its main investment decisions on an additional questionnaire among 30,000 members, as part of its mandatory survey into their risk appetite.

Solar panels

PGB’s members indicated a preference for renewable energy investments

Freek Busweiler, trustee at the scheme, said that 90% of the 3,500 respondents indicated a preference for investments in sustainable energy, whereas just 14% supported investments in arms.

However, an additional panel study showed that arms for defensive purposes were more accepted, he said.

Busweiler added that 37% supported stakes in fossil fuel companies if alternatives weren’t available.

Horeca & Catering conducted its most recent survey among both its 200,000 participants and affiliated employers at the end of 2017, generating a response from 9,500 members and 526 employers.

Detailhandel, for its part, started its survey into their participants’ views on ESG last summer, interviewing 50,000 members. It said it still had to analyse the results.

 

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