The fact that eighteen financial institutions in the Netherlands, managing around 2900 billion euro in assets, are collaborating to invest in specific goals , is an important signal to the markets. I hope this will mark the developing of a new mindset in the financial sector, just as ten years ago when the idea started to take root that institutional capital should be invested responsibly.
PGGM took part in the production of the report ‘Building Highways to SDG Investing’, that was offered to minister Ploumen on December 7th. In this report the Dutch financial sector presents recommendations for the government and the Dutch central bank on how to collaborate in financing the seventeen UN Sustainable Development Goals (SDGs).
I am personally very keen on this development , as I am convinced that the SDGs contribution to a more stable world and hence to a stronger and more sustainable economy, will ultimately help us to generate better returns for our clients.
The 17 SDG’s – I see them as the summary of the world problems – express in a very clear and compact way the big challenges we have to confront in the next decades. They demand very large investments and this requires collaboration between institutional investors, governments and supervisors.
This report contains several suggestions. We need to develop blended finance structures, allowing more private capital to be invested in SDGs through risk sharing with the government. And for consumers it should be easier to contribute to solving world problems while earning a financial return on their investments.
Furthermore, we have put forward several recommendations how to measure and report the societal impact of investments through specific indicators. This relates well to the work of the Sustainable Finance Platform which has been set up by the Dutch central bank on SDG impact measurement. Twenty Dutch financial institutions took part in the kick–off meeting of this DNB working group early December.
In collaboration with APG PGGM has worked hard this year to develop a standard for SDG investments. With a joint framework we aim to support other institutional investors who want to enlarge their impact investments.
APG is aiming to invest 58 billion euro this way in 2020. PGGM has already invested 10 billion euro for its client PFZW where market rate returns go hand in hand with tangible positive societal impact in four themes: climate, food security, water scarcity and health care. These four themes can be linked directly to the SDGs, as the common reference for investors.