“We don’t manage for impact” admits Dutch pension firm
A senior advisor in responsible investment for the second biggest pension fund in the Netherlands has admitted: “We don’t manage for impact.”
The revelation came on day two of the Global Impact Investing Network Investor Forum in Amsterdam. Around 800 delegates are attending the conference.
In a session looking to identify which of the UN Sustainable Development Goals (SDGs) impact investors were focusing on, Piet Klop, senior advisor in responsible investment at PGGM Investment, said that he had personal experience of investing according to instinct but had learnt that this needed to be tempered with pragmatism.
“Once upon a time I also believed that a great social need made a great investment opportunity – this is what we need so it’s going to be a good bet. I lost my shirt when I thought that about clean tech," Klop said.
“That’s not what our pension holders want to see. We are forced to do things that are not just good but also investable. We work the other way round: we look for things that are investable and also are delivering impact.”
“I’m going to be very honest: we don’t manage for impact. Most of you do,” he said, referring to his fellow panellists, who were from organisations with names that identified their focus: European Investment Fund, NatureVest and Global Environment Fund.
Klop continued: “We start from the other end of the spectrum. We know that there are investments that do make a difference and deliver market rate returns but… we start from the side of things that are investable first and deliver impact second.
An audience member later challenged Klop about his investment strategy given the urgency of the SDGs. He was asked: “How will you invest for a world that is failing?” This question built on a theme that arose during day one of the conference – how to invest in a world in which we can retire into.
Klop defended his actions. “We are a responsible investor. We don’t pursue returns at the expense of everything. It’s only been two or three years there has a been a groundswell for positive investments. The conditions to do that are financial in nature,” he countered.
Conference chairman Nick O’Donohoe had earlier conducted a straw poll asking which SDG subjects delegates looked to address. Access to clean water, climate and poverty were the main contenders.