Responsible investment does not come at the expense of returns, and it could even lead to better results, according to the CIOs of six large Dutch asset managers, with combined assets of €450bn.
Eloy Lindeijer, CIO at the €153bn PGGM, said: “We assume ESG investments will generate higher returns over the long term.”
As an example, he said energy-saving improvements at PGGM’s real estate investments had reduced vacancies and improved returns.
What’s more, PGGM’s recent intervention at German property firm GSW Immobilien – which culminated in the resignation of GSW’s new chief executive and its chairman of the supervisory board – triggered an increase of the company’s market value by 10% within a month, Lindeijer told IPE.
Wouter Pelser, CIO at the €90bn asset manager MN, shares Lindeijer’s enthusiasm for responsible investing.
“We don’t have a single indication our ESG policy has led to negative returns,” he said.
He indicated that MN, together with the €1bn pension fund for the fashion, interior, carpet and textile industry (MITT), had begun engaging with 15 international clothing chains to “counter the negative aspects” of the textile industry.
After two years of dialogue, he said, most companies have agreed to introduce certification and independent monitoring of their suppliers under the international ESG standard SA8000 to ensure a decent labour environment.
He added that Adidas and H&M had taken positive steps on this front, but he argued that some luxury brands were still lacking in transparency.
Edith Siermann, head of fixed income at Robeco, also believes responsible investment “contributes to long-term returns”.
She said Robeco’s engagement with energy companies had focused on the introduction of best practices for deep-sea drilling – for example, through safety, transparency on failures and compliance with regulation.
“We already see progress on regulation and transparency on policy,” Siermann said, adding that BP was now “leading the pack” as a result of the oil spill in the Gulf of Mexico.
Erik Jan van Bergen, head of asset management at SNS AM, said engagement with 16 individual mining companies had led to a concrete agreement with Chilean firm Antofagasta over transparency as a starting point for further dialogue.
He said SNS had decided to disinvest from US mining firm Rio Tinto after engagement over its allegedly polluting activities in Papua New Guinea had failed.
SNS AM’s engagement process focuses on mining, forestry and the energy sector, “as we expect we can achieve the largest ESG effects in these areas”, Van Bergen said.