Cluster bomb revelations lead to RI benchmark for Dutch pension funds

The company that supplied the information for the controversial Dutch TV documentary, Zembla, which embarrassed some of the country’s largest pension funds into withdrawing assets from cluster bomb manufacturers, is to start ranking the same funds according to their approaches to responsible investment. Profundo Research, which specializes in analysing finance issues on environmental, development and human rights, will launch the responsible benchmark for the biggest pension funds and insurance companies in December in conjunction with the Dutch sustainable development group, VBDO, and the Dutch Consumer Organisation.
Profundo provided the data on the investment holdings of Dutch pension schemes to Zembla (see useful links) for its current affairs programme earlier this year, which found that funds including ABP were invested in cluster bomb producing corporations.
The revelations prompted many Dutch pension funds to review their investment strategies and divest sensitive stakes in arms companies.
The country’s pension funds, which collectively run €700bn ($1trillion) in assets, are increasingly debating the issue of responsible investment. They fear the Dutch government could intervene to legislate on SRI issueson the back of controversial television programmes like Zembla if pension schemes do not have a clear SRI policy.
Last week in The Hague, the three Dutch pension fund umbrella organisations, VB, OPF and UvB, presented Dutch Social Affairs minister, Piet Hein Donner, with a report containing environmental, social and governance guidelines for pension funds. The 75-page report included an outline of the framework for incorporating responsible investment within the legal fiduciary duty applicable under Dutch law. The presentation was attended by a large number of Dutch pension funds.
Jan Willem van Gelder of Profundo Research, said: “Responsible investment is no longer optional, it’s a necessity. If pension funds don’t have a position then trust in the fund will be undermined for the beneficiaries. They should be able to explain what they invest in and why.”
Independent research companies and lobby groups are increasingly putting pressure on pension funds to respond to responsible investment issues. In the UK, lobby group FairPensions carries out a yearly analysis of the 20 largest pension funds on transparency and compares them to each other. Its last report said that UK pension funds were poor reporters on environmental and social issues.