The Netherlands misses out on major opportunities to create positive social and environmental impact, with 4-6% of total Dutch assets in impact investing, new study warnsMarch 28, 2022
On behalf of The Netherlands Advisory Board on impact investing
The Hague, 28 March 2022
The Netherlands misses out on major opportunities to create positive social and environmental impact, with 4-6% of total Dutch assets in impact investing, new study warns
The Netherlands may be punching below its weight in contributing to the Sustainable Development Goals, warns a study released today by the Netherlands Advisory Board on impact investing in collaboration with KPMG.
The study finds that Dutch financial sector players including pension funds, asset managers and public investors have currently invested assets worth an estimated €150-180 billion for impact, accounting for 4-6% of all Dutch assets under management. The Netherlands is strongly positioned to become a global leader in impact investing. However, the percentage of impact investments in total Dutch assets under management still remains below the 5-7% of global assets needed every year to achieve the Sustainable Development Goals by 2030.
Impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. The sector is worth 1-2 trillion dollars globally, but its growth in the Netherlands is stymied by legal and regulatory barriers, market efficiency hurdles, and an excessively conservative investment culture.
The government should urgently remove barriers to impact investing by improving financial and regulatory frameworks that are currently hampering the growth of the sector, and create conditions that foster the mobilisation of additional public and private capital to generate social and environmental benefits, the study recommends.
In parallel, Dutch institutional investors should immediately make a public commitment to at least double their impact investing allocations to a minimum of 10% of their assets under management by 2025. And in doing so, allocate at least 40% of their total impact investments to emerging and developing markets, where reaching the Sustainable Development Goals is facing a huge financing gap.
Yvonne Bakkum, Chair, Netherlands Advisory Board on impact investing, said:
“Overcoming challenges such as poverty and climate change will require the mobilisation of private funding on a massive scale. The Dutch government should lead by example by adopting an impact investing approach to the new funds included in the new coalition agreement (Regeerakkoord). For instance, by applying a blended finance approach - whereby the government and other donors assume the higher risks - the climate fund, nitrogen fund and ‘National Growth Fund’ can create opportunities for institutional investors to tag along. Only by collaborating can we realise the systemic change needed to reach the Sustainable Development Goals, and take our international reputation as frontrunner in sustainable investing to the next level.”
Marco Frikkee, Partner Sustainable Finance, KPMG, said:
“Impact investing enables investors to make a profit while generating positive social and environmental impacts. Nonetheless, 94-96% of assets under management in the Netherlands are still invested conventionally, with little or no regard to wider impacts. This needs to change. In particular, Dutch institutional investors urgently need to shift more money into investments that benefit both people and the environment.”
Sir Ronald Cohen, Chairman of the Global Steering Group for Impact Investment, said:
“Together, we must get to a point where every company couples financial reporting with reliable measurement, in monetary terms, of its impacts on the world, and government is able to incentivize positive corporate behaviour. When we reach that point, financial markets and businesses will truly be a force for good, creating a fairer and more sustainable world.”
The full study can be accessed at www.nabimpactinvesting.nl.
Laure Wessemius-Chibrac, Managing Director, Netherlands Advisory Board on impact investing
+31 6 17026107
Jolanda Peek, KPMG
+31 6 52327513