Sustainable pension: eight 
myths and facts

1. It’s not clear how my money is invested: myth
Some people feel they have little control over their pension money. For example, where does the money go to? In which companies is it invested? They cannot get their heads around it. Yet you most definitely can gain insight into your pension investments. In fact, many pension providers are quite transparent about how your money is invested.

Are you accruing a pension with Nationale-Nederlanden? Then you can check your personal online portal. Click here on your investments, the funds and then the financial information document. This document provides more information about the investment funds – and how sustainable they are. 

Being transparent
This is how Nationale-Nederlanden aims to offer maximum transparency about its sustainable investment performance and efforts. The web page Sustainable and responsible investment (SRI) tells you all about the sustainability of your pension money. Here you can also find the annual SRI report, along with investment framework, key figures and facts. It tells you exactly how we implement sustainability in our pension investments, as well as which companies are excluded from investment.

2.    Sustainable investing and returns don’t go together: myth
Another common myth is that sustainability and returns cannot go together. In the short run, a focus on sustainability may not get you very far in terms of business performance, but in the long run it usually does. 

Research shows that companies that care little about environmental legislation, for example, run more risk in the long run. This could chip away at returns. Take, for example, companies that illegally dump waste and thus pollute surface waters or jeopardise air quality. Conversely, capitalising on sustainability developments in fact offers business opportunities, for example organisations that switch from coal-fired power generation to solar and wind energy. 

Companies that pay due regard to people and planet, in addition to the environment, also generally perform better. Their choices usually pay off in the future. These companies are better capable of retaining staff and clients. In addition, they are better equipped to tackle future challenges. 

“We see that green companies are now doing better than brown companies”

Sustainable investing is no longer a niche, as observed by Strategic Product Manager Hans Kraaijeveld and Sustainability Risk Manager Debby Broos. They explain how Nationale-Nederlanden is ensuring that sustainability will be part and parcel of pension investing.
Read the entire interview with Hans and Debby 

3.    We invest money in fossil energy: fact
Nationale-Nederlanden supports the energy transition. But we also realise that this transition cannot happen overnight. To maintain energy supplies – now more than ever – we are still investing in coal-fired power plants, for example. 

However, we are in discussion with the owners, as we believe we can achieve more through engagement. We have been fairly successful in convincing companies to accelerate the energy transition. In addition, we are trying to convince these companies to invest more money in renewable energy solutions. We also keep close ties with companies that have already embraced the transition. 

4.    We do not invest money in the tobacco industry: fact
Nationale-Nederlanden applies an exclusion policy with regard to companies and industries that do not match our principles. Among those is the tobacco industry, as our support for raising a generation of non-smokers conflicts with investing in the tobacco industry. 

Who else do we exclude? Companies that do not meet internationally recognised standards, such as UN and OECD guidelines. But also companies involved in the production, development or trade of controversial arms. The entire list of excluded companies and the reasons for excluding them can be found on the NN Group website.

5.    Sustainability has only recently been on Nationale-Nederlanden’s agenda: myth
Sustainability is definitely on Nationale-Nederlanden’s agenda. But not just since recently. The issue has our attention for many years already! 

Over twenty years ago already, we included standards on people, the environment and society in our investment processes. These standards are also referred to as ESG criteria. ESG stands for Environmental, Social and Governance. We also launched the first sustainability products twenty years ago. And our biggest impacts are made through investment. 

Over time, our role in society has become increasingly more active. We are the largest pension insurance company in the Netherlands, which comes with great responsibility. And clients are increasingly inquiring into this as well. 

6.    Nationale-Nederlanden does not perform well in sustainability benchmarks: myth and fact
There are several benchmarks (comparison studies) that compare pension insurance companies. Each yields different results. Sometimes we do well, other times not so well. 

For example, we rank high in the VBDO benchmark, which examines the policies of Dutch insurance companies once every two years. 

Why we sometimes perform not so well
The tricky thing about such studies is that they often lack context. Comparing different insurance companies is also difficult. Some only invest contributions from Dutch insurance clients. Others also manage assets for large international clients. 

In addition, the Fair Insurance Guide, for example, generally applies a zero-tolerance policy. This would require us to exclude companies that perform poorly on particular issues. We do exclude some companies (see point 4), but by no means all of them. As an active shareholder, we prefer to engage with companies. What needs to be improved? How are you going to do that? Our position: if we pull out, nothing will change. Instead, by keeping discussions going about our investment trade-offs, we can effect positive change. 

7.    A sustainable pension can only be achieved through active investment: myth
We can invest your pension money either actively or passively. Active investing means investing in funds with which we expect to outperform a particular index (independently determined basket of listed companies).

With the passive type of investment, we invest in index funds of reputable providers. We buy units in these index funds with the aim of achieving a return that more or less mirrors the return on a particular index. 

Passive funds are often simpler and cheaper than active funds. And the perception that a sustainable pension can only be achieved through active investment is quite persistent. This is not true. We can ensure a sustainable pension through both active and passive investment. Even with passive investing we take account of sustainability criteria, such as exclusions, voting rights at meetings and ESG criteria. 

True enough, active investing does give our investment experts more scope to actively and directly apply sustainability criteria in investment policy. In the active life cycle, for example, we invest in fewer different companies. There, we perform better on ESG criteria.

8.    A 100% sustainable pension is not possible: fact
We do our best to invest your pension sustainably. We exclude certain companies, engage with companies we invest in and vote in favour of sustainability initiatives at shareholder meetings. Still, we cannot guarantee completely that you will not be involved in controversial issues through indirect investment. But we do try hard every day to prevent this as much as possible. And keep putting sustainability on our agenda. Will you join us? 

How green is your pension?
A lot of money is tied up in pensions. So by having your pension money invested well and consciously, you have a lot of impact on a sustainable future. Want to know how green your pension is? Simply check your personal online portal at mijn.nn Financial Future, fill in your risk profile and delve into the funds in your investment portfolio.  

This article was written by the help of our experts: