NGOs and pension fund board managers in dialogue at Dutch Pension Funds Agreement on International Responsible Investment theme meeting

The first annual meeting of the Dutch Pension Funds Agreement on International Responsible Investment on 10 September 2019 had an interactive character. Pension fund board managers and six NGOs, trade unions and government met in small groups to discuss animal welfare, freedom of association, human rights defenders, controversial weapons and arms trade, children's rights and climate change.
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The central question was how investment policy can actually contribute to the goals pursued by NGOs and trade unions. It also became clear that there is a great need for mutual information.

This meeting about the Agreement was part of a series that the Federation of the Dutch Pension Funds organises for its members about six times a year. This time with a specific character, because the participants could choose between six sub-sessions organised by the NGOs and unions involved in the Agreement. The afternoon was opened in plenary by Femke de Vries, chair of the Agreement. She explained what had been achieved in the past nine months and what remains to be done before the first year is over. For example, the Toolbox will become available in 2019 and the second case in the deep track will also be determined. Louise Kranenburg, responsible investment advisor at MN and member of the Agreement committee, spoke about the first case. She explained why a mining company was chosen. Mining naturally has risky and precarious working conditions and conflicts, often related to outsourcing and sub-contracting. Frequent violations of human rights, such as pollution of the living environment, forced relocations, pollution of water sources, violence by security guards, and inadequate consultation of those involved are common. There is also often insufficient legislation and supervision by the local government, and corruption. Improvements achieved with the specific company can have significant spill-over effects. All this from the conviction that the world has an influence on investments, but that pension fund investments also have an influence on the world. And if that influence is put to good use, pension funds can make a difference.

Federation of the Dutch Pension Funds Chairperson’ Shaktie Rambaran Mishre facilitated a plenary session where the audience could give their feedback after the subsessions in which the NGOs explained their themes. The explanation of the specific themes was experienced as very useful. It also showed that even more tools are needed to actually start working on a theme-oriented investment policy. Prioritising between different ESG interests is quite a challenge: all the above themes deserve attention. Willem van Schramade, owner of the ‘Sustainable Finance Factory’, concluded with the appeal to change the meaning again of the word ‘investment’. On the one hand, because pension funds play a large role in the allocation of resources, and therefore have a great responsibility. On the other hand, because traditional risk management overlooks major ESG-risks. The societal value is often disregarded, so that potential pricing for negative effects (such as CO2) and future transitions is not included in the risk analysis. He advises pursuing a future-proof policy that also takes into account non-direct financial effects and thus includes the total value (including ESG).