ESG and energy-transition expertise shared with industry and scientific community
To facilitate the sharing of knowledge and ideas related to responsible investment, TKP Investments organized a round-table with academic experts and industry specialists on 23 February. This lead to an interesting exchange of ideas related to Environment, Social and Governance (ESG) criteria and the energy transition.
During the meeting, colleagues from TKP Investments’ Investment Strategy Team and Multi-Management Team joined Bert Scholtens (Sustainable Banking and Finance Professor at the University of Groningen and Finance Professor at St. Andrews University), Auke Plantinga (Senior Lecturer in Finance, University of Groningen) and Luuk Feenstra (Managing Director of BBL Company/Gasunie).
New insights on responsible investment
At TKP Investments we are convinced that applying ESG criteria during the investment process can contribute to an improved risk-return profile. It was this belief that originally led us to introduce a responsible investment policy several years ago. The policy has continued to evolve to reflect the changing world we live in. We’re continually on the lookout for new and relevant insights that can help us provide the best possible advice to our clients. Colleagues and partners within the financial sector are an important source of information, as are specialists from other sectors.
Working together to solve ESG issues
During the meeting, it became clear that many questions about the implementation of ESG factors in asset management remain unanswered in both practice and from a scientific perspective. How can the impact of investments be measured correctly and concretely? And how can ESG factors be taken into account within Asset Liability Management (ALM) studies for investors? Auke Plantinga questioned whether societal expectations of institutional investors, such as pension funds, are in line with the actual impact that they can have.
The meeting confirmed the importance of regular collaboration between the business community and academics in order to find answers to these questions and to identify other pertinent issues for pension funds and other institutional investors. Bert Scholtens emphasized the importance of bringing specialists with other areas of expertise into the dialogue. Ecologists, for example, could make a valuable contribution to a discussion about climate change.
Increasing renewable energy from 2.2% to 14% by 2020
During the meeting, the energy transition was discussed in detail. Everyone was aware of the complexity of the transition to renewable energy sources. As a Gasunie employee, Luuk Feenstra is deeply involved with the process. Right now, just 2.2% of energy in the Netherlands comes from renewable sources. The government’s target is 14% by 2020. Drawing on his practical experience, Feenstra painted a clear picture of what needs to happen for the Netherlands to switch completely to renewable energy. He also provided a useful insight into the way in which companies like Gasunie are helping to facilitate the energy transition.
Pension funds and fiduciary managers have a vital role to play
The Netherlands has a long way to go in the transition to renewable energy, but pension funds and fiduciary managers can play a vital role in the process. In order to define its fiduciary role more clearly, TKP Investments will refine its scenario analysis, partially based on case studies, and continue to consult with businesses and academics closely involved with the energy transition.