NETHERLANDS - The UN Global Compact Directive is becoming a standard for the content of responsible investment, according to a Dutch academic who helped to raise the profile of the concept three years ago.

Professor Harry Hummels is linked to the European Centre for Corporate Engagement at Maastricht University is a board member of SNS Asset Management. He has played a leading role in the Netherlands in previous ESG studies, and headed a committee behind The Future has Arrived report in 2007 - a document which appealed to pension funds to adopt an SRI policy.

Earlier this week, research from the Dutch pensions representative bodies found 56 out of 90 pension funds have now signed up to the UNGC and the number of Dutch pension funds with a responsible investment policy had doubled to 73% within three years. (See earlier IPE story: Three in four Dutch pension plans adopt SRI)

So commenting on the development, Hummels said "this is a very good development as Global Compact is a clear assessment framework", though added he is somewhat disappointed that only 16 schemes have so far signed up to the UN Principles for Responsible Investment (UNPRI).

Despite the increased uptake of RI, many questions on how schemes deal with their SRI policy still need to be answered, in Hummel's opinion.

"It is important to know how schemes implement their policy, whether they take RI into account when selecting an asset manager, and whether they hold an asset manager to account for the way they carry out RI policy," the scientist pointed out.

"The announced follow-up of the investigation [by the pension bodies] should provide insight in how schemes account for their RI policy to their participants, and whether RI is actually an issue to participants," he continued.

At the same time, however, Professor Hummels was keen to stress the schemes' fiduciary responsibility to their participants must be their highest priority.

"If it comes at the expense of the long-term returns, than a scheme's board must seriously consider whether or not to implement a responsible investment policy," he said.

"However, several large Dutch asset managers such as APG and MN Services show that investments in green energy, technologies against climate change and micro-credits can combine SRI goals with proper returns," he added.

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