The International Socially Responsible Investment Agreement for Pension Funds has achieved “visible results” over the past four years, the independent Monitoring Committee concluded its latest report.

It found that Dutch pension funds had made progress in implementing of the Organisation for Economic Co-operation and Development (OECD) guidelines and therefore in the anchoring of the six ESG due diligence steps in the investment chain.

Pensions funds had made adjustments to their investment policies and several pension funds had adopted its provisions in contracts with outsourcing partners.

However, the committee noted that the implementation had turned out to be more difficult than expected, especially in naming and describing the six individual due diligence steps, naming thematic policies based on ESG risk assessment, and the implementation in contracts with outsourcing parties.

Therefore, it stated it was important to continue to utilise the investment that those in the agreement had made in knowledge, instruments, and partnerships, which would allow pension funds to further implement the guidelines in the their investment chains.

“The sector wants to continue to support pension funds with their due diligence activities through stakeholder dialogues,” the report noted.

Almost all of the 75 participating pension funds were found to have taken steps to implement the OECD guidelines and UN Guiding Principles (UNGP) in their policies and investment chains.

However, the report warned that the objective of sector-wide implementation had not been achieved.

Five pension funds had implemented all applicable sub-indicators, with the committee stating that this showed that full implementation of covenant agreements was possible.

Furthermore, 12 pension funds had collaborated with NGOs, trade unions and the government to collectively use influence to mitigate negative impacts of investments on society and the environment in all six cases.

While those committed to the agreement had invested a lot in building networks and in collective agreement, this had not yet translated to ‘impact on the ground’.

The Monitoring Committee summarised its recommendations for the future around three concepts: Urgency, cooperation, and transparency.

“I look back with pleasure on this agreement period in which the parties worked intensively together,” commented the independent chair of the agreement, Pieter van der Gaag.

“The full implementation proved to be more difficult in certain areas than expected at the start of the agreement.

“Although the full objectives of the agreement have not been achieved, the results fortunately show that a large proportion of pension funds are well on their way.

“I am therefore pleased that the Pension Federation is taking up the challenge to ensure that the lessons learned are not lost and continues to work on the covenant goals through stakeholder dialogues.”

---