NETHERLANDS - Company pension funds are still lagging behind their other Dutch colleagues in their use of sustainable investments, according to the Association of Investors for Sustainable Investment (VBDO).
The study assessed the investment policies of company-based pension schemes, industry-wide pension plans and profession-based occupational pension plans, such as those adopted by the self-employed, doctors, dentists and legal professionals.
The best performing company pension fund was the €3.6 scheme of telecom firm KPN fund as it ranked 8th on the list of 51 surveyed pension plans, according to the 3rd VBDO benchmarking study, conducted in cooperation with research consultancy Profundo.
"The fact that company schemes scored worse than industry-wide pension funds and occupational schemes is remarkable, as several of their sponsoring companies claim to be focussing on sustainability," commented Giuseppe van der Helm, director of VBDO.
He attributed the difference in part to the "usually smaller size and less transparent character" of company schemes.
More importantly, he claimed sponsoring companies ought to increase pressure on their pension funds to increase their involvement in sustainable investment projects.
VBDO uncovered evidence suggesting only 16 of the surveyed 51 schemes published an overview of their investments, and the majority of these only have a policy concerning environmental and social governance (ESG) on equity investments.
The investors' organisation argued the transparency of how asset managers commit themselves to responsible investment should therefore be increased.
The VBDO also found that 34 pension funds do not have any public debate about their investment policy.
However, the body claimed pension funds have made significant progress in the creation and implementation of responsible investment policies compared with last year.
At least 33 of the Dutch schemes said now apply an exclusion policy on their investments concerning controversial weapon industries and arms manufacturers, while 27 pension plans actively engage with companies they invest in, the research found.
Furthermore, 38 pension funds indicated that ESG criteria are taken into account when voting at shareholders meetings, and 20 schemes invest a small part of their assets in sustainable energy, clean technology innovativations and microfinance.
Although there is no legal requirement to invest in sustainability, to do so is in pension funds' interest for both commercial and moral reasons, argued Van der Helm.
"Investing in climate-related goals and scarce commodities such as water is not only the fiduciary responsibility of a long-term investor, but is also a moral obligation as an investment for the future of our children," he pointed out.
Earlier this year, a VBDO study suggested that only one-third of 30 surveyed insurers had an ESG-backed investment policy.
If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email email@example.com