Sustainable investment not detrimental to returns, say Dutch investors

Several asset managers from the Netherlands have given their backing to sustainable investment, stating that it doesn’t compromise returns and over the long-term could lead to improving figures. Separate research has suggested responsible investment leads to greater stability.

According to Investment & Pensions Europe magazine, the chief investment officers of six Dutch asset managers, with combined assets worth €450 billion (£369 billion), have vocalised their support for taking non-financial information into consideration when investing.

Environmental, social and governance (ESG) factors can have an impact on how a company performs, particularly as the number of governmental regulations in these areas increases. Investors should also consider how their investments, including those with institutional investors, reflect their personal values.

Eloy Lindeijer, chief investment manager at PGGM Investments, said, “We assume ESG investments will generate higher returns over the long-term.”

He added that energy-saving improvements within the asset manager’s real estate investments had reduced vacancies and improved returns.

PGGM has previously said that ranking multinational companies on their water usage would go a long way to driving change and reducing their water footprint. Speaking at an event in May last year, Piet Klop explained that water was a complicated commodity which makes it hard for investors to get their mind around, but a league table would make it clearer which companies were leading the field.

Wouter Pelser, chief investment officer and director of fiduciary management at another firm, MN, also said that implementing a responsible investment policy had not had a negative effect on its performance. “We don’t have a single indication our ESG policy has led to negative returns”, he added.

Previous research found that firms that invest in corporate social responsibility initiatives see less risk in their stock prices, particularly during economic downturns, benefitting both the business and shareholders.

Further reading:

Companies with positive sustainability record values higher by investors

Research links sustainability initiatives to investment stability

A simple chart that proves sustainable investment pays off

Motley Fool:  responsible investment is about ‘doing good by doing right’

Sustainable investment is about optimisation, not maximisation