The pension sector is increasingly investing sustainably and this growth is likely to continuegiven the many good intentions in the sector. This has emerged from a report issued by De Nederlandsche Bank (DNB) on a study into sustainable investment in the pension sector.
Growth manifests itself in several areas. Sustainable investment ison the rise among pension funds and the range of sustainable investment products is growing, as are the various strategies that pension funds use to incorporate sustainability in their investment policy. Consequently, sustainable investment is becoming more firmly embedded in organisations and is increasingly regarded as a regular component of risk management.
The drive for sustainability is not a mere whim, as appears from talkswe held with pension sector representatives and the fact that pension funds are incorporating sustainability in their investment beliefs. The proportion of pension funds doing so has risen quickly in recent years, from 45% in 2013 to 74% in 2015.
In 2015, 88% of pension funds indicated that they had developed a sustainability policy. The differences in intensity and ambition levels between these policies are large, however. The study revealed that in particular larger pension funds have taken steps to integrate sustainability in their investment policy and lead the field in this respect, and also enjoy a notable reputation internationally.
From reputation risk, via financial risk to financial opportunity
It is clear thatsustainable investment is now firmly on the pension funds’ agendas. Whereas sustainable investment used to be approached from the angle of the reputation risk posed by investments perceived by society as “bad”, we are now seeing attention evolve from reputation risk, via financial risk to financial opportunity.
Sustainabilityis now a standard component of risk management and considered a good and promising investment.
Sustainable investment receives the ongoing attention of the pension sector and the encircling chain, including DNB.
We note positive developments in the sector andseek to promote and encourage attention for long-term sustainable finance. This is in line with our mission to safeguard financial stability and thus contribute to sustainable prosperity in the Netherlands.
The study resulted in the formulation of several follow-up actions for making a valuable contribution to the stable development of sustainable investment from several different perspectives.
You can find the follow-up actions and more information about thestudy’s outcome in the report Sustainable investment in the Dutch pension sector.
For more information, please contact Ben Feiertag on +31 6 524 961 42.