Fifty pension funds, asset managers, insurers, banks and their umbrella organisations have committed to the Dutch government’s climate goals.

Representatives from the sectors signed the commitment to report on the climate impact of their financing and investments in the presence of Minister of Finance Wopke Hoekstra in The Hague.

The commitment means the financial sector will contribute to the implementation of the Paris Agreement and reduce greenhouse gas emissions by 49 per cent by 2030 by participating in the financing of the energy transition and report on their commitments.

According to signatory APG Group chairman Gerard van Olphen, the commitment on the part of the financial sector will have an enormous impact, as it makes up 80-90 per cent of the money in the Netherlands, and the signatories to the agreement represent €3trn.

“In the financial sector, you are primarily responsible for other people’s money, so you have to have a solid risk/return profile. You can't tell people that their pensions will be lower because we have to finance the energy transition. But this is a huge commitment, and I would almost say it is catalytic.”

van Olphen continued: “The next chapter is: How do we make sure this happens? This must not become a paper tiger. This really must be something where the financial sector will genuinely be accountable to politics and society for their efforts.”

He suggested that there must be an independent guarantee which can identify the right trends and be able to tell the sector whether they need to increase efforts.

Pensioenfederatie chair Shaktie Rambaran Mishre commented: “Pension funds invest in order to offer their participants a good pension. But we also want them to enjoy it in a liveable world. That is why we commit ourselves today to agreements on reducing CO2."

Explaining what the agreement means for stakeholders and consumers who are being told that the energy transition is unaffordable, van Olphen said that the starting point for the agreement was found in the media, that within five years, everyone will have to cook electrically or have solar panels. However, the question is who should be financially responsible.

“What matters is that you adapt to match the natural flow of the consumer. The financial sector will of course be there to support consumers in their decisions. So if you, as a consumer, want a new kitchen, then the lender will say: If you are going to make a choice anyway, then it's better to go for induction. That's different from saying: I've just had a new kitchen installed and now it turns out that I might as well replace my stove in two years’ time.

“When you are making choices about financing your kitchen, your house, your car, your company, you will find a bank, an asset manager or a pension fund that will say: We will help you finance your needs, but at the same time we will work with you to think about how you can make sustainable choices,” van Olphen explained.

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