The news that pension fund PFZW is the first major pension fund – in the Netherlands and even worldwide – to sever ties with asset manager BlackRock is making waves globally. Financial Times, Reuters, Bloomberg, El País, Politico – everyone’s talking about it.
PFZW chooses the future, Wall Street chooses fossil fuels
The step PFZW is taking stands for something big: Dutch and European financial institutions are finally showing their teeth.
Since January, we have been campaigning together with pension holders to push Dutch pension funds to cut ties with BlackRock. Will you help get your pension fund to take this step too? We’ll focus our efforts mainly on ABP. Sign up for our mailing list so we can keep you informed. Or join our Signal group to get more actively involved (both Dutch).
Within the financial sector, a huge battle is raging over the climate. Many financial institutions recognize that climate risks – floods, droughts and wildfires – pose a major threat to the entire financial system. This includes pension assets. After all, a pension doesn’t do you much good if your house is underwater, and shocks in the market or sudden write-offs can also reduce the value of your pension savings. The climate crisis is threatening to shrink pension payouts for future participants. And pension funds in the Netherlands are increasingly recognizing this risk. That’s why they’re adopting climate policies that direct more money toward climate solutions and less toward the fossil fuel industry.
At the same time, there are financial players who focus only on short-term returns. Workers can be squeezed, executives richly rewarded, smokestacks kept open for toxic emissions, and local communities trampled over. This kind of vulture capitalism is gaining ground in the United States, and with Trump in power, all bets are off. The effect has been immediate: large American asset managers like BlackRock are withdrawing from international climate agreements and no longer supporting climate resolutions at shareholder meetings.
The wolf guarding our pensions
But here’s the strange part: even those pension funds in the Netherlands that do take climate risks seriously end up strengthening the influence of those organisations that are fuelling those very risks.
Here’s how it works: every month, we and our employers pay contributions into our pension funds. Pension funds invest this money in companies so they can pay out pensions when we retire. To manage these investments, pension funds hire external asset managers. Most Dutch pension funds work with American asset managers like BlackRock, which embrace ‘no-holds-barred’ capitalism. It’s like asking a wolf to babysit the seven little goats. And then acting surprised when things go wrong.
This has major consequences, as Boris Schellekens from the Somo research group explains in this webinar (Dutch).
American asset managers are gaining more and more influence
American asset managers are increasingly pulling the strings at Dutch companies. And that’s a serious problem. While Dutch asset managers advocate for climate policies and support climate resolutions, the American giants actively obstruct them. As a rule, they don’t support climate resolutions put forward at shareholder meetings. Even though Dutch pension funds often keep their voting policies in their own hands, this still sends mixed signals to companies. That’s why PFZW rightly says it becomes ‘very complicated’ when their own asset manager takes a completely different stand.
PFZW shows that anti-climate policy comes at a price
The news of PFZW breaking with BlackRock is going global for good reason. It shows that clients will walk away when a partner goes against climate policy. PFZW’s decision stands for something bigger: if your partner’s course undermines your mission – a sustainable world – then it’s time to part ways. Companies that, under Trump’s pressure, pursue anti-climate policies need to realize they risk losing customers as a result.
On the other hand, this also fuels demand for financial institutions that do take climate risks seriously and are willing to act on them. For them, this is an encouragement to take even bolder climate steps.
What can you do?
In recent months, hundreds of PFZW participants have sent letters calling on the pension fund to break with BlackRock. Such signals from their own members are of great importance to pension funds: they push the issue higher up the agenda and give funds the legitimacy to take this kind of action.
That’s why, together with participants of pension funds like ABP, we’ll be setting up new actions in the coming period. Want to join us? Then make sure you’re on our mailing list so we can keep you updated. If you’d like to get more actively involved, join our Signal group (both Dutch).
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