STATE OF THE DUTCH IMPACT INVESTING SECTOR
Stichting Netherlands Advisory Board on impact investing (NAB), in partnership with KPMG, has conducted a landmark study of the impact investing ecosystem in the Netherlands. The initiative is a collective effort supported by many Dutch and international network organizations, among which are EVPA, Co-Financing our Future, Phenix Capital, TBLI, the GIIN, PYM, and FIN.
The study is a major step towards identifying the stakeholders involved in the impact investing ecosystem in the Netherlands, sizing the impact investing market, and investigating the barriers perceived by the various stakeholders to scaling up the impact investing sector. It gathered information and data crucial to support the highly needed growth of the impact investing sector.
The Netherlands may be punching below its weight in contributing to the Sustainable Development Goals.
The study finds that Dutch financial sector players including pension funds, asset managers, and public investors have currently invested assets worth an estimated 150-180 billion euros for impact, accounting for 4-6% of all Dutch assets under management. The Netherlands is strongly positioned to become a global leader in impact investing. However, the percentage of impact investments in total Dutch assets under management still remains below the 5-7% needed every year to achieve the Sustainable Development Goals by 2030.
Impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. The sector is worth 1-2 trillion dollars globally, but its growth in the Netherlands is stymied by legal and regulatory barriers, market efficiency hurdles, and excessively conservative investment culture.
The government should urgently remove barriers to impact investing by improving financial and regulatory frameworks that are currently hampering the growth of the sector, and create conditions that foster the mobilization of additional public and private capital to generate social and environmental benefits, the study recommends.
In parallel, Dutch institutional investors should immediately make a public commitment to at least double their impact investing allocations to a minimum of 10% of their assets under management by 2025. And in doing so, allocate at least 40% of their total impact investments to emerging and developing markets, where reaching the Sustainable Development Goals is facing a huge financing gap.
You can now read our whole report on the state of the Dutch impact investing sector.