–> This is a pre-event interview in the run-up to the Leaders in Sustainable Finance Event on February 1, 2024.
Jeroen: Kees Vendrik, thanks for taking the time to talk to Leaders in Finance in the run-up to the Leaders in Sustainable Finance event on the 1st of February next year. First off, could you introduce yourself?
Kees: I am Kees Vendrik, currently the Chair of the National Climate Platform, initiated by the Dutch government a year ago. It is an open platform for all citizens, urban and rural, small and big entrepreneurs, to share their experiences related to climate and energy transition. I compile reports every three to four months for the government, highlighting the signals, issues, and opportunities we gather from people across society.
Jeroen: Sounds like a role where you speak to many stakeholders and many different people from all walks of life and areas of both business and the public sector. What do you like specifically about your role?
Kees: Almost daily, I am out there somewhere in the country, visiting inspiring projects. For example, a new power-up initiative supported by multiple companies near Arnhem and Nijmegen, which invests in a standalone sustainable energy system. Or a dynamic energy cooperative movement in the province of Brabant, near Breda where a cooperative is involved in setting up large windmills and reinvests their profits in supporting the local community, helping people to sustain their houses. It is proof that the climate transition is happening, not just on paper. I witness people acting, investing, and figuring out how to make it work. In my hands-on approach, I make a conscious effort to listen attentively to the experiences of individuals. Each person shares an inspirational story filled with hope and opportunities. Yet, within this positivity, there is often a glitch in the system, a hindrance that needs fixing. Utilizing my energy, I delve into understanding these dynamics, pinpointing specific areas for change—whether in regulations, subsidies, or CO2-taxation—whatever it takes to facilitate progress. Subsequently, I bring these insights to the government, presenting detailed reports to the Minister of Climate and Energy and other relevant stakeholders. Engaging with various government departments and ministries, I address the issues raised by the people, striving for meaningful change.
Jeroen: Your enthusiasm is evident. Shifting to sustainable finance, a term used frequently. What does it mean to you and what is ultimately the role of the financial industry in this whole transition into a world that lives within planetary boundaries or within the transition?
Kees: Five years ago, we connected the Dutch financial sector to the climate agreement that was initiated at the Social Economic Council. And I am still very glad today that we made it work. Two key angles remain relevant. First, people need access to green capital. The financial industry, often criticized for being too risk-averse, needs to reassess its approach to support the transition. I think that’s one element that should be part of the approach of the financial industry, trying to absorb higher risk. If offering green finance at reasonable terms is challenging, alternative approaches like blended finance or collaboration with public institutions can be explored. So green finance is needed everywhere. Please be as bold as you can in the financial industry to help other entrepreneurs and citizens to take the next step. Second, measuring the carbon footprint of assets is crucial. I think we should be very candid and clear about the elephant in the room, and that is the fossil industry, fossil investment. In the next couple of years, I think the next step should be taken also by the financial industry in corporation with the supervisory authorities and the government, to phase out fossil. This step is essential to accelerate the transition and avoid maintaining an expensive fossil system alongside a new sustainable one. So, step by step, the financial industry can phase out fossil fuels as well.
Jeroen: You have touched on some challenges. If you were on the board of a major Dutch bank, what would be your biggest challenge in making this sustainable transition work?
Kees: The largest task for the financial industry is to have a closer look at the carbon footprint of your assets and portfolio and start to phase out fossil finance. This is a tough challenge because an individual financial institution might find it quite difficult to step out. So, what we need is a collaborative approach within the financial industry, as demonstrated by the climate commitment. Enhanced cooperation with the government, both national and European, is essential to set clear targets for different sectors. Facing the reality of stranded assets and engaging in deep conversations about the transition’s relationship with financial stability is necessary. It requires a proactive approach, looking beyond short-term gains.
Jeroen: Bold moves indeed. On the opportunity side, do you see financial businesses having a chance to earn money in this transition?
Kees: After years of delay, the renewable energy sector is now profitable. It is set to grow tenfold in the next decade, presenting a significant opportunity for the financial industry. Challenges exist, like supply chain issues in offshore wind, but the direction is clear. Emerging markets in sustainable energy, circular and green chemistry, and various industries transitioning toward greener practices offer plenty of opportunities. While specific risk profiles need understanding, the overall direction is evident. The financial industry must be aware of the risks tied to maintaining high levels of fossil finance and transition responsibly to avoid hindering opportunities.
Jeroen: Good insights. Lastly, with the upcoming event on February 1, is there something specific you’re looking forward to or interested in hearing from the CEOs attending?
Kees: I anticipate a day of sustainable finance discussions and look forward to Laura van Geest’s contribution. Supervisory authorities like the AFM play a crucial role in shaping debates and unlocking necessary discussions. Leadership from CEOs in steering the financial industry toward a sustainable future is vital. Seeing a collective commitment to sustainability and bold leadership at the event will be really interesting.
Jeroen: Thanks a lot, Kees Vendrik, for your time and insights. We are thrilled to have you with us, and I am personally looking forward to your contribution on the State of the Union in the Netherlands and the financial industry. Thank you!
–> This is a pre-event interview in the run-up to the Leaders in Sustainable Finance Event on February 1, 2024.