Dutch pension funds could speed up the process of improving the sustainability of their portfolios by increasing co-operation, according to the Dutch Association of Investors for Sustainable Development (VBDO).
At a presentation of the association’s annual survey, VBDO director Giuseppe van der Helm said: “Despite several small schemes performing well, there is a correlation between scale and performance on sustainability.”
The VBDO ranked the €161bn healthcare pension fund PFZW and the €345bn civil service scheme ABP in first and third place, respectively, for their green investment policies, while the €13bn pension fund for the agricultural sector, Landbouw, came in second.
Van der Helm said PFWZ and ABP had introduced “important innovations” and could help smaller schemes with “capacity building” by sharing their expertise.
The total sustainability scores for Dutch pension funds, according to VBDO’s latest benchmark survey, failed to improve against 2014.
The association found that the proportion of pension funds applying ESG criteria had increased from 12% in 2009 to 76% in 2015.
But it pointed out that this did not mean three-quarters of pension assets had been fully invested sustainably.
“Sometimes pension funds have simply excluded a few companies from their investment universe” Van der Helm said.
In his opinion, schemes must also engage with companies on their green performance, or invest in frontrunners on sustainability.
The VBDO’s survey found that responsible remuneration, labour conditions and human rights were the most commonly used criteria for ESG policies.
It also recognised a sharp increase in investments in green bonds, particularly renewable energy.
The VBDO ranked the €7.8bn pension fund for KLM pilots, Vliegend Personeel, last in its survey, conducted among nearly all of the 50 largest pension funds in the Netherlands.
The €3bn Heineken Pensioenfonds made the biggest improvement last year, jumping from 41st to 24th in the ranking.