Now that climate change is on the agenda of all pension funds, biodiversity will follow as an ESG theme that deserves more attention. More than a third of the Dutch pension funds indicate this in the annual comparative study by the Association of Investors for Sustainable Development (VBDO), among the nearly 50 largest funds. The benchmark also ranks the relatively most sustainable funds in the Netherlands.
The VBDO annually examines the responsible investment policy and performance of Dutch pension funds, with the support of FNV. The benchmark assesses the 49 largest pension funds in the Netherlands, together representing a total value of more than €1,454 billion in assets under management.
Willem Noordman of FNV indicates the importance of the benchmark: ‘The VBDO pension fund benchmark is a well-known study in the pension world, where we set the bar a little higher in terms of score every year. This is how we encourage progress. As a trade union, the ‘S’ of ESG, i.e. labor rights and human rights, naturally have our special attention. There are still many barriers and challenges in this area. This again emphasizes the need for this benchmark to keep each other on their toes and to encourage them to take those extra steps that are so badly needed to do full justice to the total ESG palette.’
ABP again ranks as most sustainable fund
This year for the fifth year in a row, ABP is the highest-scoring pension fund, with a score of 4.4 out of a maximum of 5. Dominique Dijkhuis, the ABP board member responsible for investment policy: ‘We are honored by this result and I also congratulate our colleagues on their achievements. Let’s continue to inspire and encourage each other to do better and better for our participants. This requires us to continue to critically assess where we stand. The research by VBDO provides our pension funds with a valuable perspective for doing so again this year. The urgency is great and we at ABP feel the need to make more impact in the field of climate, nature, and biodiversity. And that is why we will shortly be announcing our policy tightening up.’
ABP is closely followed by bpfBOUW (4.3) and PME (3.9). Pensioenfonds SNS REAAL climbs from 36th to 9th place, making it the fastest climber and the best-performing small pension fund (AuM <5 billion).
Biodiversity gets priority after climate
All pension funds now explicitly mention climate change in their responsible investment policies, compared to 94% in 2021 and 80% in 2020, the study shows. ‘After climate change, it seems that biodiversity is now high on the agenda,’ Sara Heinsbroek explains, the benchmark’s project manager. “Several funds have indicated that biodiversity-related activities, such as engagement dialogues with companies, will increase in the coming year.’
After biodiversity, social topics (24%) are the most frequently mentioned ESG topics that deserve the necessary focus.
Need for further deepening of climate
‘We are very proud of the results that the pension funds have shown in recent years,’ says chairman Ger Jaarsma of the Pension Federation. ‘As VBDO noted last year, responsible investment has become mainstream. However, there are still plenty of challenges, especially in the current uncertain time in which climate goals may come under pressure due to the energy crisis. It is important to keep long-term goals in mind. In addition, other ESG themes, such as those in the field of Social and Governance, also require our full attention. Fortunately, there are plenty of initiatives and partnerships within and outside the sector in which we can work together.’
Heinsbroek agrees: ‘Climate change and other ESG issues such as biodiversity are complex, interdependent issues that cannot be solved with a one-size-fits-all approach. If we really want to move towards a future-proof society, we need a broad, deep, and holistic approach.’