The role of institutional investors in creating a better world

Investment in weapons

At the beginning of the Russia–Ukraine war, Minister of Defense Kajsa Ollongren (D66) called for pension funds to invest more in the weapon industry. This conversation recently got relevant again, as BNR published a study that concluded that pension funds haven’t changed their investment strategy since the start of the war. Onno Steenbeek was asked to react: is this something you can ask from big institutional investment companies? He isn’t sure whether this is a logical demand and calls it ‘a surprising request. If our government wants money to go somewhere, they can put it there themselves,’ in Steenbeek’s opinion.

Moral considerations

The conversation does have things in common with the sustainability debate, Steenbeek agrees. Investors are becoming more conscious of the fact that you can take a stance or give off signals with your investments. The priority for pension funds is to make enough profit to be able to pay out their pensions, and companies that yield the most return aren’t always the most impactful. However, impact holds a second place for many funds. These decisions are two-fold: first, sustainable companies might survive longer, as sustainable options are gaining more popularity; secondly, it is a moral question: do you want to pay out pensions at the disadvantage of other people?

Engagement

As a scientist, Onno Steenbeek is hesitant to take a position in the debate regarding the role of institutional investors in the creation of a better world. He does however add that ‘one doesn’t exclude the other,’ referring to the fact that you can invest in less sustainable companies and impactful companies at the same time. Steenbeek also wants to emphasise engagement and the opening of conversations between funds and the companies they invest in.