The Association of Investors for Sustainable Development (VBDO) has blasted Dutch pension funds for leaving their sustainable investment policies to asset managers and failing to consult participants on the issue.
The VBDO, in its annual survey of the 50 largest pension funds in the Netherlands, found that less than 40% of the schemes had involved a third party for ESG investments.
The survey – conducted in co-operation with research bureau Profundo and financially supported by aid organisation Oxfam Novib – also showed that less than one-quarter of schemes (22%) consulted with participants on the issue directly.
Giuseppe van der Helm, director at the VBDO, told IPE: “There is still much leeway for progress by increasing the involvement of their participants, as well as the expertise on ESG matters of their board members.”
He added that his organisation was developing a course for board members to increase their knowledge on the issue.
The VBDO also found that pension funds were having trouble implementing ESG policies for alternative investments – with no more than 16 schemes having a “limited” policy for commodities.
Van der Helm, acknowledging the difficulty of assessing the sustainability of alternatives, called for greater co-operation among pension funds for the development of a policy on positive selection, for example.
He added that the VBDO was assisting this process by establishing knowledge groups for sustainable investment.
The investors association recommended that pension funds not only use the instrument of exclusion but to also encourage sustainable investment through voting during shareholder meetings, as well as engagement.
It also argued that pension funds should “pay more attention” to the ESG aspects of government bonds through exclusion or positive selection.
The €134bn healthcare scheme PFZW topped the VBDO’s list for best performing pension fund on ESG factors, with the €10.2bn pension fund for the agricultural sector, Landbouw, and the €4.1bn scheme PNO Media in second and third place, respectively.
The €293bn civil service scheme ABP remained in fourth place.