It is common for pension funds to make choices in their sustainability policy to support certain sustainable development goals (SDGs). These choices are often made by preference studies among participants or by the scope of the industry or underlying company(s) to which the pension fund is linked. Of course, the desire to apply focus, and thus generate more impact, also plays a role.
We recently mapped out which SDGs are most popular among the larger Dutch pension funds. This creates an interesting picture.
Our research shows SDG 13 ‘Climate Action’ as the most popular. But SDG 3 ‘Good Health and Well-being’ and SDG 7 ‘Affordable and clean energy’ are also often chosen focus areas. It is clear – and of course not surprising – that climate change and reducing global warming and greenhouse gas emissions are high on the agenda. A good pension can only be enjoyed if living conditions will allow that.
And that is precisely why we think it is very important to keep a broad perspective. And that brings us to (the loss of) biodiversity. Research, including from the United Nations, shows that biodiversity is currently declining at a faster rate than ever before. And this loss of biodiversity has five main causes[1]:
- Land and sea use change and destruction,
- Pollution,
- Excessive exploitation (overfishing, over-extraction of freshwater, hunting),
- Invasive alien species (plants, animals, organisms), and
- Climate change.
This means that we can actually see climate change as part of an even bigger challenge, namely the loss of biodiversity. It is estimated that about half (!) of our economic output depends on nature in some way. And for our water and food supply, that percentage is of course even higher.
We therefore expect that the focus within sustainability will gradually shift from climate change and the energy transition to the preservation of biodiversity. The importance and influence of biodiversity for our prosperity, but certainly also our well-being, is simply far too great. This also means that more attention, and more capital, will have to be made available for, among other things, SDG 14 ‘Life below water’, and SDG 15 ‘Life on land’. In addition, these can also be considered as well ‘investable’ SDGs. SDG 14 ‘Life below water’ is known to be the SDG with the largest funding gap, despite the rapidly growing market of ‘blue bonds’. We expect this to improve in the coming years.
[1] Global assessment report on the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, IPEBS, 2019.
