Pension funds have not just the ability, but the responsibility, to invest with a long term horizon from an ESG perspective
INTERVIEW - Meet the editorial board: Frans van de Veen
Constant Korthout invites Frans van de Veen as the next participant in this ‘relay interview’. His reason: unions have always played an important part in the Dutch pension system. How do you see their role in the future?
What is your personal motivation to SHIFT TO?
By investing with a longer horizon we can ensure that companies are able and willing to achieve truly sustainable results. Not just profits for shareholders; but also sustainable value that profits other stakeholders such as their employees, society at large, and the environment. Too often these days, companies are looking for short-term results. Investments must be recouped within two years.
In my work for the Dutch trade union I see this too often. The result is that the job satisfaction of workers decreases, the quality of products and services comes under pressure, and too little is done to encourage innovation and contribute to the development of employees. As a knowledge-sharing platform I hope that SHIFT TO can at least partially contribute to a change in ‘the way things are’ and we can all shift to long term thinking and work together for a bright future.
How does this fit into your professional ambitions?
Pension funds have a long-term horizon. The real question is how we can ensure that the invested retirement pension money will be there after 35 years. And we don’t just want this money expressed in disposable cash; we also want to see our long term investment in a livable environment and a healthy and happy society come to fruition. This is precisely why pension funds have not just the ability, but the responsibility, to invest with a long term horizon from an ESG perspective.
In your opinion, where should the financial industry be in seven years’ time?
A sector that is reliable and is approachable in its dealings. A sector which does not cause harm to society, but rather ensures a better functioning society and a better functioning economy. This high performance will be in conjunction with ESG goals.
Who should we definitely hear from in this newsroom?
Listed companies can learn from ‘cooperaties’- a cooperative form of business with official status in Benelux amongst other areas - and family businesses. In periods of crises these organisations hold on to their goals, and that enables them to exist for a longer period than some other types or organisations. Particularly I’d love to hear from Ton Loman, outgoing CEO of Agrifirm, a cooperatie. I'd love to hear how he views the ‘combination cooperatie’ which is built up of daughter companies; internationalisation; ESG and long-term investing; and how we can compare his views with those in listed companies. And again, I’d like to hear these opinions from the leaders of (listed) family business.
Which issue is most urgent in your view/field of work?
As a union leader the increasingly present gap between the privileged and the underprivileged in society; between people with work with a future, who have a good income and a good network and on the other hand people with temporary work, uncertain of their future, and who in spite of hard work cannot save money. They are also hampered in building up a full retirement. This is affecting the social component in ESG in the Netherlands, and we will see more issues around this in future.
Extra question from Constant Korthout:
'There is a lot of concern amongst employees about the question of whether the current pension system is financially sustainable. What kind of role do you see for unions to address these concerns?'
As Dutch trade unions we have to work on a common pension system which is supported by all generations and which is feasible. The big question is how we will be able to maintain a collective pension system in which risks such as longevity and disability are shared. On the other hand more personal choices are in play and this collective pension system has to deliver value for money for all generations. The challenge here is enable people in a job market with shorter, flexible work contracts to be able to build up a full pension, without falling into the trap of using pension money meant for later, today.
'Long term investing is not only possible as shareholder. I think PGGM does have experience with other solutions. What is your opinion about long -term investing for those who are not shareholders?'
The members of the editorial board of SHIFT TO all have professional but also very personal reasons to join this initiative. In a ‘relay interview’ we learn more about their motivations as they ask each other: ‘Why do you want to SHIFT TO?’