The Dutch government has been urged to work in collaboration with pension funds, banks and asset managers on climate issues, after the Financial Sector Climate Commitment Committee (CFSK) said that cooperation between public and private parties is of "increasing importance" in the current geopolitical situation.

The comments were made alongside the committee's latest progress report, which revealed that Dutch pension funds, banks, asset managers and insurers have contributed to the Paris Agreement and the climate objectives that build on it, and all signatories to the Climate Commitment have drawn up an action plan.

In particular, the report noted that many institutions have tightened their policies, implemented stricter guidelines or new engagement programs and/or restructured their portfolios towards more low-carbon companies.

In addition to this, it found that financial institutions are increasingly integrating the management of their climate goals into their policies and governance.

However, the group admitted that while progress is being seen, it remains difficult to indicate causality, stressing the need for caution when drawing conclusions about a possible trend in reported emissions based on the measured data.

Work is underway to improve transparency and comparability, however, as the group also revealed that work is being done to align the reporting standards used with European regulations (including the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR)).

To this end, the CFSK is currently working on a revision of the current guidance with the aim of aligning reporting with legislation in the field of sustainability reporting, improving comparability and thus increasing transparency, whilst also reducing the reporting burden for signatories.

However, the committee argued that, in order to achieve the long-term objective of net zero by 2050, the financial sector needs to "intensify" cooperation with the government in order to optimally facilitate the players in the transition.

"Good cooperation between public and private parties is of increasing importance in the current geopolitical situation. Climate change remains a risk, both economically and ecologically," the committee stated in a letter to the Ministry of Finance.

In particular, the committee argued that institutions need consistent government policy in relation to climate change.

"To achieve these climate goals, effective cooperation between the government, the financial sector and companies in the real economy is necessary," the letter continued.

"By signing the Climate Commitment, the sector underlines the importance of its own role by contributing to emission reductions in the real economy through the companies in which they invest or invest.

"At the same time, they also challenge themselves to indicate what is possible within the risk and return standards used.

"The positive impact of this opportunity-oriented approach should not be underestimated. But more is needed to achieve the climate goals."

Given this, the committee pushed for a framework of agreements, in favor of effective cooperation between the government, the financial sector and companies in the real economy.

"In concrete terms, this means that effectiveness can be increased if the government also further defines its role in the climate transition and applies consistent climate policy," it stated.

In particular, the committee said the government could formulate guiding sector goals, so that the national transition path is "clear and predictable".

The group also encouraged the government to recognise and strengthen the "important role" it has in facilitating investment opportunities and building financing coalitions, in particular through Invest-NL.

In addition to this, it encouraged the government to be actively committed to further harmonization of European sustainability legislation and regulations.

The letter was signed on behalf of the Dutch Fund and Asset Management Association, the Dutch Banking Association, the Pension Federation, the Association of Insurers and all financial institutions involved.

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