Post-Brexit pension partners in the EU: France
As we recently wrote, the UK's departure from the EU makes it imperative that we look fornew pension alliances as a matter of urgency. There is much for us to learn if we take a pragmatic and realistic look at a range of different subjects. Such as the opportunities for sustainable investment in France - in our view, there are shared interests between Dutch pension funds and the French economy.
France does not have pension funds as we know them in the Netherlands and is always searching for reliable foreign capital to finance projects. PGGM currently has roughly 15 billion euros invested in the French economy, for example. We see France as a promising country, offering investment opportunities in green government bonds as well as in businesses, the road network and public transport.
French companies are pleased with our investment capital, as it provides them with the funds to realise more of their ambitions. And the return PGGM achieves on these investments makes an important contribution to Dutch pensions.
Since Emmanuel Macron became President of France in 2017, the French government has worked closely with businesses to shape climate policy. Macron feels indebted to the UN climate agreement, which bears the name of the French capital and for which his country played an important role in the negotiation process.
At the same time, the European Commission is now developing legislation relating to sustainable investment. These sustainable finance regulations are intended to answer the question as to what constitutes a truly green investment. The aim is to create a uniform classification of green activities in Europe, which is essential for institutional investors seeking to integrate 'green' into their investment policies.
The EU sustainable finance initiative will therefore provide the frameworks within which institutional investors can shape their sustainable investments. France offers potential for green projects, which will require private capital.The challenge for PGGM is to anticipate effectively on the role we can play as a pension fundinvestor.
If we can agree on shared interests and challenges for sustainable investments in an EU context, it may become possible to create understanding in other areas as well and eventually to forge collaboration. The upshot is that it becomes easier and more attractive to do business, for example in France, allowing us to provide a good pension and enabling us to act on implementing the Paris Agreement.
This is the second blog in our series about post-Brexit pension alliances. The first one was published on December 12, 2018.
Authors: Michel de Jonge, Nine de Graaf and Peter Oortmann (trainee Public Affairs)
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