Path:

Just how responsible is Aegon?

The Hague, The Netherlands, June 1, 2015

Last year, Responsible Investment (RI) Advisor, Rob Lake, scrutinized processes and attitudes towards RI at Aegon. In this candid interview he outlines his findings, which will be used to develop our RI ambitions for 2015 and beyond.

Wind turbines in countryside

Most investment firms these days claim to invest responsibly. Is it still meaningful?

Yes and no. It's becoming increasingly clear that something like climate change will have significant financial implications for all investors. However, some investors are also concerned about issues that are less clear in terms of financial impact – take tobacco or nuclear weapons. Also, there are always new challenges thrown to investors by the public and by campaigners, some are more relevant than others. So you see a great variety in how investors approach these issues.

How have you seen responsible investment develop?

The early days of RI were in the 80s. There were specialist SRI funds that excluded alcohol, tobacco and pornography. Since then we've seen mainstream investors developing an approach. This is not a question of having a specialist product – although many mainstream investors still do – it's about making this work across the entire portfolio.

It used to be about cluster bombs, now people are concerned about climate change and are starting to demand fossil-free investments.
 

 

Ten years ago companies were starting to think about this, and would write a policy, and give someone responsibility to implement it. Now organizations are reviewing these policies and concluding that these things need to be more firmly embedded. Aegon is a perfect example. I think this has come about because the outside world has changed – different expectations and demands are now placed on investors – it used to be about cluster bombs, now people are concerned about climate change and are starting to demand fossil-free investments.

What observations did you make based on the many interviews with employees?

What I saw was quite similar to many other organizations: strong differences in perspectives, in level of interest and in understanding of Environmental, Social and Corporate Governance (ESG) issues. This is only natural in such a large organization with so many different functions and geographies. I found that some people were very focused on exclusions, others trying to figure out financial risks, others on influencing companies. I found yet another group that was working on impact investment: consciously trying to channel your money to areas that have a clear environmental or social impact.

One discussion with a US employee stands out: we talked about the Deepwater Horizon case. He took this as real evidence that disregarding ESG issues (in that specific case, health & safety standards) can have big financial impact.

The final stage of my project was a discussion with the chief executive of Aegon Group; this demonstrates that it has become an issue for the entire company. I think this is healthy for a company, and not something I find everywhere – commitment and engaged discussion right from the top.

What recommendations did you make to Aegon senior management?

I had two broad recommendations, the first being 'formalize and embed'. You see a company like Aegon doing a great number of good things but it often relies on informal arrangements and personal relationships. You'd like to formalize these things in roles and procedures, and need to make it clear there's top level support. Often, people in large organizations want to see evidence of that, that it's encouraged to work on these things.

Aegon sees that strong performance in RI is required of a company that wants to be a leader and strong performer in the insurance and pension markets.

 

My second recommendation was to think about the ways RI can contribute to broader strategy and ambitions for Aegon. For example, there are long-term themes that are very relevant for a life insurance and pensions company like Aegon that is making long term commitments to its clients. Take climate change, again, as an example – it's something you need to be on top of, and through RI there are many things you can also do to mitigate climate change risks.

Aegon sees that strong performance in RI is required of a company that wants to be a leader and strong performer in the insurance and pension markets. Looking diligently where there may be advantages to pursuing opportunities in the ESG area is something to aspire to, as Aegon has done.

Written by: Aegon

Rob Lake - Independent Responsible Investment Advisor

About Rob Lake


Rob Lake is an independent Responsible Investment (RI) advisor. He has been in investment, sustainability and corporate governance roles for 15 years at organizations including Henderson, APG (the Dutch pension fund) and the Principles for Responsible Investment (PRI).

Contact

Media Relations

Links

2014 Responsible Investment Report >
2014 Annual Review >

Newsletter Alert

Quick sign up >
View previous newsletters >