Pension funds in the Netherlands have made some progress in integrating climate risks in their investment strategies, but on average still do not receive a pass mark according to a study by pressure group VBDO. Insurers score even worse than pension funds.

VBDO examined the climate risk policies of the 50 largest pension funds and 30 insurance firms. In 2019, the organisation had performed a similar exercise. This year’s edition was sponsored by asset manager LGIM.

In comparison to 2019, pension funds scored better across the board, but the average score still only came in at 4.7 (up from 3.4 in 2019) on a 10-point scale. Insurance firms also improved their scores (to 2.9), but from an even lower starting point of just 1.9.

Overall, only 12 out of the 80 participating institutions received a score of at least 6.

VBDO declined to name the scores of individual pension funds or insurers, but shared the top-10 results with IPE (see table). Insurance firms Athora Netherlands and NN Group topped the list, while civil service scheme ABP was the best scoring pension fund.

1 Athora Netherlands
2 NN Group
3 Stichting Pensioenfonds ABP
4 a.s.r.
8 PostNL
10 Achmea

Athora scored especially well because it has formulated absolute, scientifically validated targets for carbon reduction. “Besides that they also engage pro-actively with companies and other stakeholders about these and related subjects,” said Lucienne de Bakker, a project manager at VBDO.


All pension funds in the study bar one explicitly mentioned climate change in their investment policies, but most failed to elaborate on how they map and manage the climate risks of their own investments.

VBDO director Angélique Laskewitz said she wants to see more concrete climate targets that are in line with the goals of the Paris Agreement.

She said: “So far we mostly see a focus on mitigating climate risks in portfolios, but at the same time more attention needs to be paid to making portfolios as well as the real economy resilient to climate change. Only a handful of institutional investors has implemented a policy on ensuring climate resilience next to managing climate risks.”

According to VBDO, climate resilience is mostly about managing threats to companies’ facilities and the surrounding infrastructure emanating from extreme weather events caused by climate change, such as floods, storms or drought.

“Pension funds and insurers should not focus solely on the effects of climate change on their own investments, but also on the impacts on the environment they operate in,” noted De Bakker.

Among other things, they should strive to better understand the positive and negative external effects of the companies they invest in, and the climate impact of their supply chains, she added.

Pension funds should also be more vocal in their engagement efforts with companies, according to De Bakker. “We like to see investors developing a clear engagement and escalation strategy,” she said.

Pension funds should dare to say they will sell their stakes in certain firms if they don’t improve their sustainability credentials, and should be as transparent as possible about it. She added: “If investors make public when a company is on its final warning, that would be a helpful signal to other stakeholders too.”

BMO GAM: Link climate targets to executive pay

BMO GAM, fiduciary manager of several Dutch pension funds, wants companies to link executive remuneration to the achievement of climate-related objectives.

As part of its efforts to hold companies to account, it will engage with companies across industries including oil and gas, mining, materials, electric utilities, transportation and automotive and financial institutions on how executive pay is linked to climate strategy, said Claudia Wearmouth, co-head of responsible investment at the firm.

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