Frequently Asked Questions

About banks

To answer this question, you need to assess the risk that the bank invests in controversial companies and projects. Netwerk Vlaanderen has produced an overview of these risks, for each bank. And, from this research it can be seen that in Belgium Triodos Bank offers the best guarantee that your money does not end up being used to support controversial practices.

Netwerk researches investments made by the most important financial institutions. This can also be referred to as mainstream banking. So far, we have researched the investments of ABN Amro, AXA, Dexia, Fortis, ING, KBC, Citibank, and Deutsche Bank. Combined, they account for over 80% of the financial transactions on the Belgian market. In contrast to smaller banks, they are also more active internationally. The main reason we only conduct research on the large banks is the cost of research. The research in bank investments is very expensive, due to the cost of access to specialised databases of financial information. Netwerk is a small organisation with limited resources, and therefore we must make choices.

From information that we have found on the website and annual reports of Argenta, it appears that this bank has no ethical criteria for its investment policy. They have not taken a position regarding investments in the arms industry of companies involved in the breach of human rights. We can assume that they effectively invest in these companies. Argenta does not offer any sustainable financial products to its customers.

About sustainable saving, investment, and insurance

No, that is a misconception. Banks apply the same interest rates for sustainable savings accounts as for traditional products. You also have a social benefit: your money is invested in products that benefit people and the environment.

Unfortunately no banks in Belgium currently offer sustainable current accounts for individuals. Organisations and companies with a social, ecological or cultural purpose can open a sustainable current account with Triodos.

Ehical pensions are available via First Pensioensparen from Ethias. Ethias is the only financial institution that offers the chance to save ethically or sustainably for your pension in Belgium.

Various studies have shown that the return does not differ significantly from non-sustainable funds. They score neither better nor worse. If we do not view return in purely financial terms, but also look at the social benefits, the sustainable products naturally score higher than traditional products.

By investing in a sustainable investment fund or sustainable life insurance policy, you participate in the investment risk. In other words, if your shares do badly on the stock market, you will carry the loss.

If you would like to invest in a sustainable fund with as small risk as possible, then pay attention to the following point: some funds offer a capital guarantee. This means that they guarantee to pay back the invested capital on the date at which the fund matures. Another point for attention is the risk class of the fund. This will be between zero (lowest risk) and seven (highest risk). As a general rule: the higher the percentage of shares in the portfolio of the fund, the higher the risk.
 

The risk of a sustainable investment is related to the organization in which you invest. If this organisation gets into financial problems, there is a chance that you will not get (part of) your money back.

As your money is being used to support a project, it is sometimes not so easy to get your money back at short notice. In most cases, these projects are dependent on financial support from others in order to be able to carry on their activities. Most shares cannot be traded, and there is only a short period each year when people can withdraw from the project. Bonds can also not normally be traded, which means that you can only get your money back when the bond matures. The precise ways in which this works will vary from project to project.

It normally only takes a few days to get hold of your money. However, a sustainable investment fund is less attractive in this regard than a sustainable investment fund, for example. In the first instance you will normally have to pay costs for withdrawing from the fund. If you need your money back after one year, this can be a very high penalty. Furthermore, investment funds are designed for investments over a long term, so you should be careful when you withdraw from the fund. It can be possible that the fund has just gone through a bad period, and if you withdraw at this point there is a chance that you will make a loss.

Sustainable life insurance policies have limited liquidity. Some of the money can be easily withdrawn, some cannot. The precise possibilities depend on the specific product that you select. Ask the financial institution in advance.

In the sector of sustainable saving and investment, there are numerous terms which refer to (more or less) the same things. Ethical saving and investment is in other words the same as sustainable saving and investment. Another term that is often used is Socially Responsible Investment. In the vision of Netwerk, some savings products are truly sustainable in the sense that they ensure that your money goes in the correct direction, while for most investment funds the bar is set too low. The term ‘sustainable investment’ can therefore be misleading.

In sustainable investment funds, your money is mainly used to invest in shares or bonds in stock market listed companies. They are screened against a number of social and/or ethical criteria, and perform the best in their sector. The strength and quality of this screening varies from fund to fund, and it is therefore not easy to determine the social benefit of the companies that are being financed.

But about from the (sometime doubtful) quality of the screening, the most important concern is that these remain stock market listed companies. In order to keep shareholders happy, a company that is listed on the stock market must offer an ‘attractive’ return on investments. ‘Attractive’ often means ‘as large as possible’. You are dealing mainly with companies that are not afraid to maximise their profits. Furthermore, the stock market listing implies that in contrast to companies that are not listed on the market, these companies have ready access to the capital market. Sustainable small and medium businesses, non-profit organizations, many companies in developing countries, etc. do not have the possibility to be included in the portfolio of investment funds, as they are not listed on the stock market. It is exactly this type of enterprise that often has the greatest need of investment.

A second concern is that the so-called sustainable investment funds contain companies whose activities have little to do with sustainability. Oil drilling, car manufacturing, or selling air travel can happen in a slightly greener manner, but a fundamental analysis shows that these are activities which in the long term must be reduced or stop entirely. If you are keen that your savings and investments contribute to the reorientation of the economy then most sustainable funds will fall short of the mark.

In contrast, supporters of sustainable investment refer to the reach of the companies in question. If the largest companies in the sector can be encouraged to pay attention to sustainable business practices, then they can set a good example to others. Furthermore, the activities of the companies are often so large that even a small change in direction can have a significant positive impact.

To show that sustainable investment can actually have a positive impact on stock market listed companies, you can look at a number of elements. The direct questioning in the context of a screening can make a company think about things to which it did not previously pay attention. It is also a question of image. It is a good sign to be included in an ‘ethical’ investment fund. If a company is excluded, it may be encouraged to pay extra attention to sustainable development in order to pass the screening. The fact that managers of a sustainable funds can become active shareholders, voting and asking critical questions at the shareholders meetings of the companies, is an important argument for many people who support the concept of sustainable investment.

The question of whether 'sustainable development' and 'investment' can be combined is not simple. It is a question of what you believe, and what you would like to happen with your money. It depends on whether you choose to support small-scale initiatives which can mean a great deal for a small group of people, or if you choose to do battle with the giants, and see that your money will encourage them to take small steps which will contribute to sustainable development for many.

The destination of my money

In theory, banks do not reveal which activities they finance. But you can assume that banks can participate in any request for funds that is made anywhere in the world. This could be a family that would like to build a house, or a producer of cluster munitions, as long as the banks can guarantee that they will repay the loan and that the activity is not strictly illegal.

It is therefore difficult to determine where your savings are being invested. The reason that the banks give is 'client confidentiality’.

Triodos bank represents something of an exception. They do state which projects receive credit, and what this is used for. Triodos gets around the client confidentiality argument by adding a clause to the credit contract which states that this information may be made public. A Triodos customer can therefore receive a list of all the companies which have receive credit from Triodos, as well as a short description of the project.

Investment funds have to publish an annual (or half-yearly) report in which they list the companies in which they have invested. This report can be obtained for free from the institution offering the product.

Sustainable life insurance products also have to make a half-yearly report. In their case, there is no legal obligation to make known which companies and institutions they are investing in. In practice, they often make the names known of the largest shareholdings in the portfolio.

In a direct sustainable investment you choose the project yourself, and can be sure that you know what is being done with your money.

There is no legal obligation to reveal the projects that are being supported through indirect sustainable investment. The specialized financiers normally use the annual report to give an overview of the credit that has been given. As shareholder you can request this information.

The law banning the investment in landmines and cluster munitions was approved by the Belgian Parliament on 1st March 2007. Belgium is the first country in the world to take such an initiative. Netwerk Vlaanderen has studied the law and has produced a Questions and Answers document which answers questions such as: what is punishment if you invest in these weapons, which financial groups are obliged to follow this law, and who controls the implementation of the law.

About our campaigns and education

Do you want to inform your friends about controversial investments made by banks? Would you like to give a lesson about sustainable investment? Are you writing an article about financial flows?

Netwerk Vlaanderen can offer a range of tools to help. To start with, we have a number of reports dealing with the investment behaviour of banks and giving a critical look at the world of sustainable investment. You can also find articles on these subjects in our magazine.

Netwerk also offers a range of educational videos.

Netwerk also has a number of speakers who can talk about one of the themes. If you would like advice about how to approach these issues, please get in touch with us.

Your voice is very important. The more bank employees who become aware of these themes, the greater the pressure on policy makers to make investments more sustainable. The campaign “My Money. Clear Conscience?” has gained a huge amount from the support of the largest trade union in the financial sector. What you can do yourself depends for a great deal on what position you have within a bank, as well as the internal organization of the bank and communication channels. In any case, you can give information to your colleagues, or ask questions in your works council, or to the CSR department or the management. Netwerk Vlaanderen has developed a handbook for trade union representatives and gives advice to individual employees that would like to do something. You can request this from mathias@netwerkvlaanderen.be.

About the organisation
  • Government subsidies: 59%
  • Commission from financial institutions: 25%
  • Donations: 7%
  • Own income: 9%

Netwerk is looking for reinforcements for our task force. This group of volunteers makes Netwerk visible through street actions and interactive stands at festivals. There are also volunteers active with Netwerk as members of the board of directors, and in the office. You can also take part in research for the forum on investment in sustainability. The doors are open for you.
Contact: mathias@netwerkvlaanderen.be

Netwerk Rentevrij is also looking for volunteers for its credit committee.
Contact: tom@rentevrij.be