More than 70 large Dutch pension funds with combined assets of almost €1.2trn have signed a covenant with NGOs, trade unions and the Dutch government pledging worldwide co-operation on sustainable investment.
The aim of the agreement is to exert worldwide influence on policies and outcomes related to human rights, labour conditions and the environment through pension funds’ combined investment clout.
By mapping risks and negative impacts of investments, based on the UN’s Guiding Principles for businesses and human rights and OECD guidelines, companies must provide pension funds with a better picture of where human rights violations and environmental damage occur.
This would enable pension funds to mitigate risks and use their influence for solving problems, using the expertise, experience and networks of the other participants in the covenant.
The document has been signed by the Netherlands’ ministries for finance, foreign trade and development co-operation, and social affairs and employment.
The signatories also include charities Oxfam Novib, PAX, Amnesty International Netherlands, Save the Children Netherlands, World Animal Protection and environmental organisation Natuur & Milieu.
The signatories said they would co-operate on six projects – to be announced next year – aimed at boosting the impact of pension funds.
The development of the covenant for sustainable investing for pension funds was co-ordinated by the Social and Economic Council (SER), which has supported similar agreements with insurers and banks.
The pension fund of chemicals giant DSM and KLM’s scheme for ground staff have already announced that they have signed the document.
The €1.6bn Pensioenfonds Gasunie said that it may sign if the – as yet unknown – participation costs turn out to be reasonable.
The signatories must factor the OECD guidelines – stipulating how pension funds must trace and report risks – into their ESG policy within two years.
A yet-to-be-established monitoring committee will check how schemes honour their commitments.