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I belong to Generation Z and won’t retire for another 40 years. Still, I am seriously concerned. On Tuesday, June 4, a motion by the VVD, BBB and SGP against “activist or idealistic” investing was adopted. The motion requests the government to investigate how the principle of “a pension with purchasing power for participants” can be anchored.
In the opinion of the supporting parties, pension funds are too concerned with achieving politically driven goals. The goals referred to? That pension funds no longer want to invest in the fossil industry and that they take too much into account of people and the environment in their investment choices.
This motion supremely surprises me. “Activist investing” will ensure a pension with purchasing power for participants in the future. In the short term – and therefore also for the current generation of retirees – it is true that money can be made from irresponsible investing. In the short term, the fossil industry provides good returns. But in the medium and long term the picture changes.
We are actively ruining our planet. To give just a few examples; half of the world’s plastic was made in the last 15 years, and the Great Pacific Garbage Patch is 3 times the size of France. In Brazil, an area the size of Luxembourg is deforested every year and the annual number of major natural disasters is only increasing. In the US in the 1980s, the average cost of climate-related disasters was $3.3 billion. Over the past 5 years, this has averaged $20.4 per year.
The idea that the investments of pension funds are completely separate from the consequences of climate change, now and in the future, is naive, to put it mildly. Companies, just like people, feel the negative consequences of climate change: areas become uninhabitable and raw materials become scarcer. This will have a direct negative impact on the activities of these companies, which will result in a risk for the future results of pension funds. If we continue our current course, achieving a “pension with purchasing power” will not be possible for my generation and the ones that follow. We have then completely exceeded the planetary boundaries of our world.
Will we look back to 2024, the year in which instead of doing everything we could to combat climate change, we were too busy labelling socially responsible investing as “activist and idealistic”? Like everyone else, I also want a nice “purchasing power” pension with which I can achieve the promised Zwitserleven feeling, but I ask myself: what is money worth in an uninhabitable world? The solution to climate change is not for sale, no matter however purchase powerful your pension may be.
This article was first published in Het Nederlands Dagblad.
