10 February 2021, Amsterdam, NL – Today, Edelman Amsterdam publishes the fifth Edelman Trust Barometer Special Report: Institutional Investors Netherlands. The study identifies key issues shaping investment criteria around Environmental, Social and Governance (ESG), climate change, employee engagement, shareholder activism, and retail investment. The proprietary research surveyed 700 institutional investors in seven markets and was fielded from August 11, 2021, to September 3, 2021.
The study reveals that trust in ESG and Diversity, Equity, and Inclusion (DEI) reporting has plummeted as investors have increased expectations of companies' societal and environmental efforts. Building ESG trust with investors continues to be an uphill battle, as 85% of Dutch respondents express their belief that businesses frequently overstate or exaggerate ESG progress when disclosing results. Meanwhile, 77% of Dutch institutional investors express that they do not believe that companies will achieve their ESG or DEI commitments.
"Investors are questioning the validity of companies' environmental and societal disclosures and commitments. Ensuring that ESG is reported with the same accuracy and diligence as financial reporting is more critical than ever,” says Jacqueline Lenterman, Financial Communications Director at Edelman Amsterdam.
Our results show that 92% of Dutch investors are interested in taking an activist approach when investing, while 69% expressed that they are willing to take aggressive activist measures. “If companies do not take a proactive approach to address growing investor concerns surrounding issues such as ESG and executive remuneration, they leave themselves vulnerable to activist influence,” said Lenterman.
Notable highlights from the Edelman Trust Barometer Special Report: Institutional Investors in The Netherlands include:
Building ESG trust with investors is an uphill battle
87% percent of Dutch investors agree that the government should apply more pressure to enforce ESG compliance. Moreover, 77% of Dutch investors do not believe companies will achieve their ESG commitments.
Investors are pushing for climate action
94% of Dutch investors expect companies to both establish and communicate a plan for achieving net zero emissions. Moreover, 87% of Dutch investors agree that companies that have articulated a net zero plan deserve a premium. However, 79% are concerned that companies will not be able to meet net zero commitments.
Investors see value in the empowered employee
The study reveals that employee engagement builds investor trust, with 90% of Dutch investors indicating that having a workplace culture that fosters employee empowerment is important for building trust in companies. In addition, 69% investors agree that employee activism signals a healthy workplace culture.
Traditional investors are engaging in activist behaviour
Dutch institutional investors are proactively approaching activists to effect change. In the Netherlands, 93% of investors say that they approached reputable activists with ideas for drive change in companies which they are considering investing in. 2 out of 3 investors indicate they would be willing to use aggressive activist measures, such as pressuring management for operation/government changes or publicizing concerns with company strategy.
The rise of meme-stocks and retail investors as the next disruptors
90% percent of Dutch investors are concerned that conversations taking place within online communities' influence investment decisions – and 91% percent believe ‘Meme Stocks’ represent a targeted attack against institutional investors.
The Edelman Trust Barometer Special Report: Institutional Investors is based on an online quantitative survey of 700 institutional investors in the U.S., Canada, UK, Germany, the Netherlands, the Middle East and Japan. Participants included financial analysts (32 percent), investment stewardship (20 percent), chief investment officers (26 percent), portfolio managers (14 percent), directors of research (5 percent) and buy-side analysts (3 percent). Data Fieldwork was conducted by Edelman Intelligence between August 11 – September 3, 2021.
Edelman’s Amsterdam team of more than 90 professionals is a tight-knit group of practice experts who thrive on the city’s unique character and creativity. Our diverse range of clients includes top international and Dutch companies, and in many cases, we coordinate strategy development and execution of activities not only in the Netherlands, but across the globe.
+31 6 46179731
Eamon van Stijn
+31 6 13164413