ESG-risico’s hoog op de agenda van pensioenfondsbesturen, maar meer actie en integratie in het risicobeheer is nodig.

There’s an increasing urgency to manage ESG risks due to rapid climate change, biodiversity loss, and evolving societal norms. These pose financial risks affecting long-term investments, alongside highlighted social risks like reputational damage from ethical issues in supply chains. Therefore, the DNB has conducted a survey and on-site inspections regarding ESG risk management among 39 pension funds in April 2023.
The urgency to manage ESG risks, driven by climate change, biodiversity loss, and societal norms, is highlighted.
The survey focused on the progress of integrating ESG risks into core processes, including business models, strategy, governance, risk management, information provision, and the investment cycle. The results indicate that some funds have made significant progress, but many still need to understand, disclose, and manage ESG risks better.
Pension funds are giving serious consideration to ESG risks in their governance, with a majority explicitly assigning responsibility for ESG risk management to at least one board member.
Efforts are being made to enhance ESG knowledge. While pension funds are taking steps to integrate ESG risks into their strategies, the policies often lack concrete goals and key performance indicators, hindering effective management of ESG objectives.
Some funds are considering a concentrated equity portfolio with active management as part of their socially responsible investment approach to manage ESG risks. However, this strategy comes with increased concentration risks and asset management costs, requiring careful consideration of justification, framework, monitoring, and control.
The integration of ESG risks into the risk management cycle needs attention in many funds. Although a majority have conducted materiality analyses, over half find the quality of these analyses insufficient. Materiality analyses often provide limited insight into the impact and dependence on ESG risks, lacking concrete risk indicators and tolerances for risk assessment.
The DNB emphasizes the importance of ESG risk management, offering the Guide for the Management of Climate and Environmental Risks as a roadmap for funds starting their ESG risk management journey. The DNB remains committed to informing and encouraging the sector in this critical area.