Dutch pension funds have set out to defend their approach to investment in the arms industry, following calls from the Dutch Defence Minister for schemes to ramp up investment in defence stocks.

According to a report from Dutch news service BNR, the investment in defence companies by the five largest pension funds in the Netherlands stood at 0.1 per cent of total invested capital, a level at odds with the government’s stated aims to increase the defence budget to 2 per cent of gross domestic product (GDP).

According to BNR, the House of Representatives called for greater pensions investment in defence companies in November 2022, prompted by the war in Ukraine. However, funds have yet to take any major steps towards meeting the Hague’s calls for greater investment. And in an interview with Dutch news service BNR last week, Kajsa Ollongren, Minister of Defence for the Netherlands, called again on pension funds to increase investment in defence stocks, saying funds should ask themselves if they wanted to be “part of the problem, or part of the solution.”

Responding to the comments, ABP, the fund for Dutch state and educational workers, said: “ABP has long invested several hundred million in the defence industry. But these investments have to meet certain conditions before we can invest in them.”

ABP said the amount it invests in arms companies has increased in recent years, and added: “We do not invest in weapons that are banned internationally and we look at the risk, return, costs and sustainability of an investment.”

ABP said that companies must issue shares or corporate bonds (debt securities) in order for pension funds to be able to invest – and only then “if the conditions are right”.

ABP’s CEO Harmen van Wijnen said: "If governments need money to finance weapons, they can issue a government bond that pension funds and other large investors can invest in. We are always ready for a constructive discussion on this with the Ministry of Defence."

Meanwhile, PME’s chairman Eric Uijen said: “We do invest in the defence industry. But we do set conditions. We do not invest in companies that make weapons that cause a lot of damage to civilians, during or after a war. Producers of nuclear weapons, landmines, cluster bombs and white phosphorus are therefore on our black list. Nor do we invest in companies that make firearms for consumers.

“I therefore do not understand the recent statements by politicians and generals that pension funds are part of the problem in European defence,” Uijen said.

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