Pension funds sign up to cooperate on sustainable investment
By investing their assets, pension funds can exert influence worldwide, for example in relation to human rights and the environment. In order to exert that influence more efficiently, a better understanding of the risks in the global investment chain and cooperation with local partners are required. 73 Funds, which together represent 1179 billion euros in invested assets, are signing the agreement today for this purpose.
Funds increase understanding of risks
By clearly identifying – on the basis of UNGPs and OECD guidelines – worldwide risks and negative impacts from investments, pension funds will gain a clearer picture of the places where risks and impacts occur relating to human rights violations or environmental damage, for example. With this information, they can reduce risks and exert their influence to solve problems. They can make use of the knowledge and experience of the other parties to the agreement and their local partners to do this.
Projects relating to human and labour rights
Under the agreement, parties will work together on six projects in which cooperation can increase the influence of pension funds. The first case will be made known in January.
Broad support for the agreement
Three ministries, six NGOs and three trade unions are signing this agreement, giving it broad support.
In addition to the 73 pension funds and the Federation of the Dutch Pension Funds [Pensioenfederatie], signatories include the NGOs Oxfam Novib, PAX, Amnesty International Netherlands, Save the Children Netherlands, World Animal Protection and Natuur & Milieu [Nature & The Environment]; the trade unions FNV (Dutch Federation of Trade Unions), CNV (National Federation of Christian Trade Unions in the Netherlands) and VCP (Trade union federation for Professionals); and Minister of Finance Wopke Hoekstra, Minister of Foreign Trade and Development Cooperation Sigrid Kaag and Minister of Social Affairs and Employment Wouter Koolmees.
Dutch pensions sector
Pension funds together invest around 1340 billion euros. This is money from participants in pension funds, who ensure that the assets increase to provide good pensions to their members. Within the pensions sector, 73 funds are signatories to the agreement and together they represent 1179 billion euros of managed assets. There is great diversity among funds, and organisations vary hugely in size and influence. In this agreement, the funds join forces with public authorities, trade unions and NGOs to exert a positive influence worldwide.
Eight agreements signed
The agreement was arrived at with guidance from the Social and Economic Council of the Netherlands (SER). With this new agreement, signatories will work within the financial sector on international responsible investment. Earlier agreements have been reached with banks and insurers.
Agreements on International Responsible Business Conduct (IRBC) have also been signed in the sectors Sustainable Garments and Textile, Sustainable Forestry, Vegetable protein, the Gold Sector and Food Products Sector. A total of eight agreements have now been signed. Talks are still continuing in, among others, the Natural Stone, Floriculture and Metallurgy sectors. For a comprehensive overview, go to www.imvoconvenanten.nl
Jacqueline Cramer, independent chairperson during the drafting of the agreement
‘From the very first discussions on this agreement, there was great readiness on the part of all the parties to arrive at an agreement. I am proud of the fact that we finalised everything within one year. This signing is the first step; it will be great if the parties can maintain their momentum in implementing the provisions of the agreement.’
Mariëtte Hamer, president of the SER
‘Since the SER recommendation on IRBC agreements in 2014, eight agreements have been concluded. Sectors are themselves taking the initiative to gain a clearer picture of their chain and make it more sustainable. After banks and insurers, there is now the pensions agreement, which shows us that there is a widespread need in the financial sector to gain a good understanding of the chain in order for the sector to have greater awareness in using its influence. It is good that the agreements can serve as an instrument for this purpose.’
Shaktie Rambaran Mishre, Federation of the Dutch Pension Funds
“As the pensions sector, we invest money that comes from hard-working Dutch residents. With this task comes the responsibility to do the job well: we not only want every member to be able to look forward to a good pension, but we also want them to enjoy that pension in a clean and safe world. With our investments, we can have an influence worldwide on companies that we invest in and on the manner in which they deal with humans, animals and the environment. The IRBC agreement provides tools and guidelines for this purpose. Unique in our sector is that we go one step further and cooperate with government, NGOs and trade unions on specific cases. This enables us to make use of one another’s knowledge and networks in order to have an even greater impact. For this reason, I am pleased that so many pension funds are signing the agreement today.”
Wouter Koolmees, Minister of Social Affairs and Employment
‘With the agreement, pension funds are showing that they take their responsibility seriously by managing the pension savings of members and pensioners prudently, with a focus on returns and on risks to human rights and the environment.’
Wopke Hoekstra, Minister of Finance
‘I am pleased that pension funds, following on from the banking and insurance sectors, have shouldered their responsibility and arrived at this agreement. This cooperation between pension funds, NGOs, trade unions and government helps to prevent investments from having negative consequences for humans, animals and the environment. In addition, I think it is extremely important for the financial sector to build on a relationship of trust with the consumer. Transparency is of great importance in this regard.’
Arend van Wijngaarden, president of the CNV
‘With this agreement, we hope to gain a better understanding of the worldwide investment value chains of pension funds, so as to ensure that labour rights of workers are respected throughout the chain.’
Tuur Elzinga, vice-chairman of FNV
‘On average, people work one day a week for their pension. In that case, you do not want that money to be invested in companies that treat their own staff badly. The FNV representatives in the pension funds are already monitoring this. But with this agreement, we can now also make our knowledge and international connections more broadly available to the other parties to the agreement.’
Bob van der Wal, Member of the Executive Board of the VCP
‘A large proportion of the working population in the Netherlands set aside 20% of their income each year for their old-age pension. This sum has to bring returns if it is to become a full pension, but from now on, this will not be done at any price. Most people who invest in their pension feel themselves to be – and behave as – stewards of the Earth and this shall have to be passed on to future generations. This is where the limits are when it comes to investing. Transforming the world into a sustainable place is no longer a project of ‘activists’, but rather an administrative effort which can, by the way, also produce good yields.’
Pim Kraan, director of Save the Children Netherlands
‘With an investment portfolio of around 1340 billion euros, the Dutch pensions sector is one of the largest in the world. Dutch pension funds therefore have great influence worldwide. Thanks to the Agreement on International Responsible Investment for the Pensions Sector, they can, together with various other parties, bring about positive changes for children on a large scale.’
Pascal de Smit, director of World Animal Protection Netherlands
‘In view of the huge risks to animal welfare connected with investments by Dutch pension funds, we see an important role for World Animal Protection in helping pension funds to identify and mitigate these risks. We expect the agreement to be of great value in this regard.’
Michiel Servaes, general director of Oxfam Novib
‘With this agreement, pension funds are taking responsibility. And this is as it should be, because as major financial and societal players, I expect them to counter investment risks, such as the impairment of labour rights, and make a positive contribution to the fight against poverty and for the climate. As NGOs, we will of course continue to watch them critically and monitor the achievement of concrete results.’
Emine Bozkurt, director of human rights policy at Amnesty International
‘We are happy that a large number of pension funds have signed this agreement, and we are confident that this agreement will make a significant contribution to ensuring that the investments by pension funds are increasingly socially responsible. If pension funds set the bar high, this will work through into the policies and practices of the companies they invest in. Ultimately, our aim is for companies to operate with respect for human rights.’
Jan Gruiters, general director of PAX
‘The pension funds that are signing this agreement have combined assets of hundreds of billions of euros. They must use this power to prevent the companies in which they invest from causing damage to humans and the environment. They must also hold companies to account for damage that has already been caused. PAX will keep a close eye on this in its role as watchdog.’