Recently, Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics, was asked for her expertise on the news that pension funds have the ambition to switch to sustainable investing. This process is rather slow, but why is that?
In a few years, the number of pension funds holding green bonds has increased sharply. The green bond market is growing very fast, but as a whole is still only a small part of the bond market. As more and more big players start fishing in the 'pond' of green bonds, they are gradually running out. That, given the small market share of green bonds, is what is happening now.
What a pension fund invests in is decided at the pension fund board level. However, they often draw up this plan only once a year, making the cycle very slow. This is characterised as one of the biggest causes of the slow switch to sustainable investing, Pieterse-Bloem said.
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You can listen to the full episode from BNR Nieuwsradio, 20 June 2023, here.