pension fund blues

Sustainable Investing: 'It's Complicated'

Rainer Jakubowski Bert Bostelmann for HB Bildfolio
Rainer Jakubowski strives to be transparent.
  • Why it matters

    Why it matters

    Socially responsible, or sustainable, investing is an important issue for many investors, but large pension fund managers such as Germany’s BVV are still seeking the right balance between profits and ethics.

  • Facts


    • BVV manages €25.8 billion, or $31.4 billion, in assets for financial-sector employees.
    • Mr. Jakubowski’s legal, fiduciary obligation to insured members comes before ethical considerations such as sustainability.
    • BVV developed its own sustainability handbook and sees areas where sustainability and profit can go “hand in hand,” Mr. Jakubowski said.
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Rainer Jakubowski doesn’t mince words. As head of Germany’s largest pension fund provider, BVV, Mr. Jakubowski is responsible for €25.8 billion, or $31.4 billion, in assets under management for financial-sector employees. He believes in sustainable investing, but not at any cost, and he refuses to sacrifice fiduciary responsibility for political correctness, he told Handelsblatt.


Handelsblatt: Is sustainable investing an issue for your pension fund?

Mr. Jakubowski: It would not be socially acceptable at all to act unsustainably. That would create problems with our insured members. We would be taking a position against the societal majority. But investment returns remain in the foreground. In the end, that’s the promise we have made.

To whom?

We have a fiduciary obligation to the insured. And Bafin, Germany’s supervisory authority naturally also demands the security, viability and liquidity of our investments. That is mandatory.

Exactly how do you invest sustainably?

We started five years ago with the process of elimination. For instance, we don’t want to own securities of arms dealers. Since then, we have developed our own handbook. But sustainability and profitability are often competing goals. We have concluded that the sustainability factor tips the scales for us with investments that otherwise rank the same.

Do you sometimes feel like an outsider when the issue is held in such high esteem by investors and society at large?

We really are sustainable. Ethical considerations have always played a role with us. Anything else would be inappropriate for a pension fund. But, for us, this is not some smokescreen.

Do you mean that others use political correctness as an excuse to push sustainability?

Yes, I think so. Let’s take a very general example that has had a big impact: the energy transition and the Renewable Energy Law. Was it right for us to distance ourselves so far from other countries with this? What matters to me is that one cannot even question it today without being immediately stigmatized.

Stigmatized also among other investors?

The issue has captivated some big investors because public representatives and shareholders like it that way. It’s a trendy topic. Sometimes I really would like to speak out about sustainability fanatics. But I hold my tongue sometimes.

Who’s being honest and who’s being dishonest?

It isn’t black and white. It’s complicated. More complicated than many would like to believe. Take the example of government bonds. We do not own many government bonds simply because of the returns, but what about governments that export weapons? If one takes the issue very seriously, then one shouldn’t buy German government bonds either.

Where do you have fewer problems with the issue?

Real estate. A green and energy-efficient building increases its value. There is hardly any potential for conflict. And the economic aspects come to the fore naturally. Sustainability and profit go hand in hand.

What is your target yield at the moment?

Currently 3.8 percent without taking into consideration extraordinary effects.

What’s the future of sustainability at BVV?

With our handbook, we feel we are well positioned in all asset classes. In commodities, for example, we haven’t invested in agricultural products for some time.


Handelsblatt’s Ingo Narat writes about finance. To contact the author:

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