Sustainable investment is still not seen as an obligation by many Dutch pension funds, according to the Netherlands’ Association for Investors in Sustainable Development (VBDO).
In the 11th edition of its annual benchmarking report, it highlighted that, despite a continuing increase of pension funds factoring in environmental, social and governance (ESG) criteria into their investment policies, 56% of the surveyed 50 largest schemes still hadn’t set sustainability targets.
It found that the ESG performance had primarily improved at the mid-section of the monitored pension funds, with the best- and weakest-performing schemes hardly making progress in 2016.
However, the VBDO reported improvements on transparency, while noting that large differences remained on quality and depth of sustainability reporting.
The lobbying organisation urged pension funds to speed up the expansion of their responsible investments, and to focus in particular on tackling climate change.
The top performer in VBDO’s rankings was again healthcare scheme PFZW, with civil service pension fund ABP trailing closely. PFZW has come top of the rankings for 11 years in a row.
The industry-wide schemes for the agricultural sector (BPL Pensioen), the building industry (BpfBouw) and housing corporations (SPW) were also among the best performers.
In contrast, the three large KLM schemes, the pension fund for pharmacy staff (PMA) and the pension fund of steelworks Hoogovens ended up at the lowest end of the scale.
In its latest report, the VBDO replaced its ranking system with a star rating, at the request of the pensions sector.
“According to the pension funds, the traditional ranking system triggered too much competition, while, in their opinion, the sector would better be served with co-operation,” explained Rudy Verstappen, one of the authors of the VBDO report.
The VBDO assessed pension funds for governance, policy, their accounting for sustainable investment as well as implementation, with a focus on the latter.
Angélique Laskewitz, VBDO’s director, said that nine pension funds have joined the association. Until recently, its membership chiefly comprised asset managers, insurers and banks.