A discussion with Henco about impact investment
Through investments, TNO Pension Fund has an impact on society. This is done through so-called 'impact investments'. Henco van Ommeren is a Board member of TNO Pension Fund and talks more about this.
Henco van Ommeren works at TNO as assistant unit controller in the Healthy Living & Work unit in Leiden and is also involved in TNO Pension Fund in addition to his job at TNO. He has sat on the Board of the Pension Fund for almost four years now, and for some time now he has chaired the Executive Committee, which deals with the Environment, Social and Governance (ESG) policy.
'ESG really appeals to me,' Henco says. 'As a Pension Fund, you manage a pot with a large amount of money, and you can do nice things with that money that make a difference. As the ESG committee, we advise the Board on the ESG policy to be pursued and its practical implementation. Impact investments are also part of that.'
Where does it start and what are impact investments?
'We meet with the ESG committee once every two months. Those meetings are always attended by several Board members, a number of staff members from the administrative office and an external consultant from Cardano. We then discuss what opportunities there are to actively contribute to sustainability. One of the topics, therefore, is impact investment. Impact investments are investments in companies that aim to have a positive impact on the world around us. These are therefore investments that are good for people and the environment. That could include investments in technical solutions.'
How do you determine the themes?
'First of all, a few years ago there was a survey of participants on our sustainability policy. In that survey, respondents were also asked what they thought were important themes. Ultimately, three themes emerged: climate, health and energy transition, which also align with TNO's strategy. Since 2023, TNO Pension Fund has started making impact investments in this way. As a committee, we prepare that strategy and the TNO Pension Fund administrative office and the asset managers implement the policy. Then, as an ESG committee, we monitor and evaluate the results.'
'Incidentally, the fact that we invest in an organization that grew out of TNO is a coincidence and not a conscious choice. As a fund, we are independent'
What do you consider when choosing such an investment?
'As a fund, we look at a number of conditions. For example, an investment must have the aim of achieving a positive social or environmental impact. So it must not be a by-product. Moreover, with KIPs, it must be clearly measurable. We also look at the additionality of the impact investment. We really want to enable something extra, something that otherwise could not have been realized without the investment in those companies. Our investment in Innovation Industries, which targets the European Deep Tech market, fulfils this. Just like the TNO spin-off Nearfield Instruments. Incidentally, the fact that we invest in an organization that grew out of TNO is a coincidence and not a conscious choice. As a fund, we are independent.'
How big is the effect?
'More and more data is becoming available to measure impact. This enables us to measure the carbon footprint of our investment portfolio. Our goal is to be fully carbon neutral by 2050 in line with the Paris Climate Agreement. Whether that will succeed remains to be seen, but we are on the right track. What you see is that the data needed to measure the impact is also evolving. Take biodiversity, for example. There is still little data available on that. What you then often see is that, as EU directives become stricter, more data also becomes available. It is important not to wait for that, but rather to act now.'
'We aim to mitigate those risks with targeted investments. In doing so, we are not looking at the impact we can already realize next year, but rather we are looking at the long-term effects over 30 years.'
What else is important for readers to know?
'Opinions on ESG policy vary among pension fund members. Some participants think we should do nothing about sustainability and other participants think we are still doing far too little. Those differences are there and always will be. What is especially important to realize is that we are long-term investors. For example, TNO Pension Fund sees the climate crisis and biodiversity risk as long-term risks. We aim to mitigate those risks with targeted investments. In doing so, we are not looking at the impact we can already realize next year, but rather we are looking at the long-term effects over 30 years.'
What can you say about returns?
'Of course, achieving a positive financial return remains important. You have to balance return and impact. As a pension fund, our mission is to achieve both financial and social returns.'
'I have been an active Board member at TNO Pension Fund for almost 4 years now. I do that for about one day a week, in addition to my work at TNO.'
Finally, how did you get involved with the Pension Fund?
'There are a large number of changes going on in pension land, and I wanted to be closely involved in that. So when a vacancy opened up, I applied. Moreover, the job advertisement specifically asked for someone under 40 years of age to ensure that the interests of younger TNOs will also be well represented. And at the age of 31, I certainly meet that criteria. I have been an active Board member at TNO Pension Fund for almost 4 years now. I do that for about one day a week, in addition to my work at TNO. With the transition to the new pension system, it does take a bit more work because of extra consultations and meetings, but it’s certainly enjoyable. It's complex stuff, but very interesting.'
What is clear is that Henco is very enthusiastic and committed to the work of TNO Pension Fund and certainly the ESG policy. If you want to know more about what TNO Pension Fund is doing in the area of sustainability, be sure to check out the pages on sustainability on our site and follow the news from the Pension Fund.
How much money is in impact investments?
TNO Pension Fund's 2023 annual report shows that approximately 201 million euros was invested in impact bonds at the end of last year. That is an increase of 47 million from the previous year and about 12.5% of investments (excluding mortgages). By September 2024, that had increased to approximately 304 million euros. This is expected to rise further in the coming years.
Angélique Laskewitz (VBDO), Hans Groenewegen and Wim van Dijk.
TNO Pension Fund wins award for sustainable investments
TNO Pension Fund has won an award in the new pension funds benchmark 2024 by the Association of Investors for Sustainable Development [Vereniging van Beleggers voor Duurzame Ontwikkelingen, VBDO]. We have been named top performer in the small pension funds category when it comes to responsible investment. We are very proud of that. Read more about it in the newsletter on our website.