Benchmark Responsible Investment by Dutch Pension Funds 2023

Benchmark Duch Pension Funds Key findings

Female board representation remains low

In the 2015 benchmark report, it was reported that only 16% of Dutch pension fund board members were women. In this year’s research, this percentage has risen to 32%. This is still well below 50%. More than half (61%) of the funds in scope have boards where at least two-thirds (66%) of members are male.

Head start on the incorporation of biodiversity

54% Of pension funds reported that they had a biodiversity policy in place (self-reported) in 2022. Several others indicated that the development of such a policy is currently underway. However, only 5% of pension funds indicated that their biodiversity policy includes concrete and timebound elements.

In-depth engagement for the government bond portfolio still a challenge

The challenges and various transitions global society at large is facing cannot be addressed without collaboration with governments and policymakers. As financiers, pension funds are uniquely positioned to support and collaborate with relevant institutions and policymakers. An investor statement is a strong signifier of desired change, but the importance of confidential direct dialogue should not be underestimated. 47% of pension funds reported direct engagement dialogues with policymakers.

Solid overall implementation of responsible investment processes and instruments

As concluded in the 2021 benchmark report, responsible investment and its related processes, such as ESG risk analysis, are now mainstream. This year, we have seen continued implementation of these processes and an advancement in the use of RI instruments.

Recommendations

Take ownership of your choices regarding responsible investment and sustainability

Uncomfortable conversations need to be had, so don’t put them off or ignore those whose views differ from your own. Doing the bare minimum on sustainability is as much of a choice as doing more than legally required. It is therefore no longer sufficient to mostly rely on external parties when determining the fund’s sustainability strategy and related activities and when making choices with regards to RI and sustainability. The pension funds themselves, and their boards in particular, must be in control of determining their vision with regards to RI and setting the course to make this vision a reality. VBDO sees a key role for boards in moving beyond process-based improvements towards in-depth approaches tailored to each fund’s specific vision and topics.

Take action and work towards change

As the need to address complex and interlinked sustainability challenges grows more urgent, pension funds will need to take action and do so quickly. This means decisions will need to be made based on less than perfect information and data sets. Grow comfortable using alternative sources of information and making decisions based on incomplete pictures. Uncomfortable conversations need to be had, so don’t put them off or ignore those whose views differ from your own. At the same time, ensure you keep fostering relationships and collaborating with peers and like-minded parties to broaden your knowledge and effectively work towards the goals you want to accomplish.

Benchmark Dutch Pension Funds Ranking 2023