Press Release: No ESG backlash among Dutch pension funds, if anything, a sharper focus on real world impact

Finance Ideas, a Netherlands-based consultancy firm that works for and with international and local investors on sustainable investing, publishes the results of a large-scale study into the effectiveness of sustainable investing by Dutch pension funds. The research combines in-depth interviews with 31 pension funds (collectively managing more than €775 billion in AuM), conversations with sustainability experts from ten international asset managers, and an extensive literature review. The central question: what is the effectiveness of sustainable investing, and what conclusions are Dutch pension funds drawing from it?

No backlash, but clear momentum

Despite global political headwinds, there is no ESG backlash among Dutch pension funds. Sustainability is widely recognised as financially material, aligned with participant preferences, and part of fiduciary duty. The majority of funds surveyed (23 out of 31) intend to intensify their sustainability efforts over the next two years. Notably, pension funds show a growing openness to higher-impact investment solutions in sectors and regions where capital is scarce — such as venture capital in Europe or emerging markets. While only a small percentage of funds ‘fully agree’ on this point, the large majority are neutral to positive.

Taking action, with due regard for risk

Contributing to a liveable world, an ambition that many Dutch pension funds explicitly embrace, is complex and requires exploring less familiar territory. This sometimes brings new challenges and risks. A measured approach underpinned by strong governance is therefore essential. After all, pension funds’ primary obligation is to deliver good pensions for their participants in that liveable world.

Five key findings

The research identifies five central findings:

• No sustainability backlash: sustainability remains financially material and part of fiduciary duty for Dutch pension funds.
• Positive intentions to increase effectiveness: deeper stewardship, investment in impact and European innovation, and improved dialogue with participants about their impact preferences. A strong desire for greater collaboration between funds also stands out.
• Need for sharper choices: greater clarity on objectives and implementation is required, particularly around impact investing: why, how and where is impact being pursued?
• Geopolitical challenges: growing market influence and dependence on the US in terms of growth, inflation, financial markets and sustainability pathways call for a reassessment of allocations and positioning.
• Governance and alignment as key levers: further strengthening of governance and clear alignment with outsourced partners are critical. Pension funds are increasingly asking not only whether an asset manager can implement their policy, but whether that manager actively embodies and reinforces it.

Asset manager alignment: a shift in expectations

A striking finding is the shift in how pension funds view their asset managers. Where in the past it was sufficient for a manager to implement the fund’s policy, funds now expect their managers to actively champion and reinforce their sustainability ambitions. At the same time, sustainability experts at asset managers unanimously indicated that their clients ultimately determine how ambitious they can be, and called on pension funds to define their requirements and expectations more precisely.

Public markets offer scale, private markets offer deeper impact

Dutch pension funds are largely aware of the academic evidence: real-world impact through asset allocation in public markets is limited unless a large majority of investors move in the same direction. This explains the growing importance pension funds attach to how their asset managers align.

Engagement and voting are the most promising instruments in public markets, but success depends on multiple factors and takes time, especially when addressing root causes, which often requires engaging entire value chains and governments. Private markets offer greater potential for genuine change, but the research emphasises that not everything that sounds green actually drives real-world transformation.

Geopolitics demands a rethink

Dutch pension funds are heavily exposed to the United States, from asset holdings to data providers, technology platforms and trading infrastructure. As geopolitical shifts appear increasingly structural, the urgency to reassess regional asset allocation is growing. Europe offers opportunities through the Draghi agenda, while emerging markets present large financing gaps with high impact potential.

“We are positively surprised by the growing willingness of pension funds to explore higher-impact investment solutions, including in sectors and regions where capital is scarce. What we saw in the interviews: there is real movement in thinking. Equally striking was the strong desire for greater collaboration. Many funds see themselves as ‘smart followers’, but by moving together towards more real world impact, collective leadership emerges. We are very happy to contribute to that collaboration.”
Vincent van Bijleveld, Finance Ideas

About the research

The research was conducted by Finance Ideas under the supervision of a steering committee comprising SPIN, bpf Detailhandel and bpfBOUW. It includes:

• In-depth interviews with 31 Dutch pension funds (collectively > €775 billion AuM)
• Insights from 10 international asset managers
• An extensive literature review
• A closed-door summit attended by approximately 75 participants (pension funds, asset managers, fiduciary managers)