🇳🇱 Dutch Pension Funds and the Transition Bond Credibility Gap

📊 A Deep-Dive into ESG Risk, Taxonomy Scoring, and Sustainable Finance Data Integrity

---

📘 Overview

This repository supports the article:
Dutch Pension Funds’ Bet on Transition Bonds: Data Shows a Credibility Gap?

We conducted a multi-stage data-driven audit of transition bonds held by four major Dutch pension funds (ABP, PFZW, PME, and PMT). Using over 1,000 pages of disclosures, we extracted and scored bond-level alignment with the EU Taxonomy, verified KPI disclosures, and modeled exposure to stranded asset risk under different climate scenarios.

---

🔍 Key Findings

• ✅ Only 37% of bond proceeds were fully aligned with EU Taxonomy thresholds
• ❌ 60% of reported KPIs lacked third-party assurance or science-based benchmarks
• ⚠️ Up to €2.1 billion at risk of being stranded under revised EU climate rules
• 📉 PME and PMT had the lowest average bond credibility scores
• 🔄 Misclassification found between SFDR Article 9 and actual environmental performance

---

🖼️ Visual Gallery

Visual	Description
Figure 1	Growth of transition bond holdings (2020–2023) across Dutch pension funds
Figure 2	EU Taxonomy alignment levels of transition bonds
Figure 3	KPI verification status (self-reported vs. externally assured)
Table 1	Bond scoring breakdown by sector and SFDR classification
Table 2	Sectoral exposure to transition risk (€ millions)

All figures and tables are located in the visuals/ folder.

---

🧠 Technical Framework

🛠 Tools Used

• Python (tabula-py, pandas, matplotlib, seaborn)
• Excel (pivot tables, formula-based scoring, cross-validation)
• Jupyter Notebooks (for scoring logic, scenario modeling, visual generation)
• Binder (for public, reproducible access)

🧪 Analysis Performed

• Manual extraction of bond disclosures from SFDR templates and reports (2020–2023)
• Scoring model for EU taxonomy alignment
• KPI audit and classification (verified vs internal benchmarks)
• Sectoral heatmapping of climate risk exposure
• Scenario simulation for potential stranded asset losses
• Portfolio-level inconsistencies flagged between stated SFDR classification and real-world impact

---

🧱 Repository Structure

📦 transition-bonds-netherlands-pension-risk-analysis
├── 📄 article/
│   └── Dutch Pension Funds and the Credibility Challenge of Transition Bonds.pdf
├── 📁 data/
│   └── Extracted and cleaned datasets used for scoring, modeling, and visuals
├── 📁 visuals/
│   └── Project figures and charts used in the article and README
├── 📁 notebooks/
│   ├── data_extraction.ipynb
│   ├── taxonomy_scoring_model.xlsx
│   ├── scenario_modeling.ipynb
│   └── verification_analysis.ipynb
└── 📄 README.md

---

🚧 Barriers, Risks, and Misconduct Potential

• ⚠️ Inconsistent disclosure formats across funds
• 🧾 Lack of mandatory KPI verification
• 🔐 Internal KPI creation without third-party assurance
• 📉 Misuse of SFDR Article 9 classification
• 🔍 Insufficient sectoral stress testing for high-risk investments

---

🧭 Policy Implications and Strategic Recommendations

Recommendation	Impact
✅ Mandatory third-party KPI audits	Improves ESG disclosure credibility
✅ Clarify Taxonomy-SFDR alignment thresholds	Minimizes greenwashing loopholes
✅ Fund-level scenario stress testing	Identifies sectoral risk concentrations
✅ Interactive ESG dashboards	Enhances transparency for regulators & stakeholders
✅ Enforcement against mislabeling	Reduces credibility risk in transition bond markets

---

📢 Call to Action

🔎 For Dutch and EU financial policymakers, pension analysts, and ESG strategists:

• Assess your SFDR Article 9 allocations using real taxonomy data
• Audit internal KPIs for climate science alignment and assurance
• Adopt multi-variable scoring systems to validate fund-level alignment
• Use heatmaps and simulations to prepare for upcoming policy tightening

📄 Read the full research here:
LinkedIn Article

---

📄 PDF Download

Offline or academic reference:
Dutch Pension Funds and the Credibility Challenge of Transition Bonds.pdf

---

📚 How to Cite

Aziz, S. (2025). Saveeza/-transition-bonds-netherlands-pension-risk-analysis: Initial Zenodo Release — Pension Funds and the Credibility Challenge of Transition Bonds (Netherlands) (v1.0). Zenodo. https://doi.org/10.5281/zenodo.16148035

---

✅ Project Status

• Article completed and peer-reviewed
• Data cleaned, structured, and stored in /data/
• Custom scoring model developed
• All visuals rendered and described
• Jupyter Notebooks created and documented
• Policy recommendations integrated
• Binder access enabled
• GitHub structure finalized
• Ready for collaboration or academic use

---

About the Author

Saveeza Aziz is a sustainable finance data analyst focused on ESG taxonomy, climate policy, and high-complexity financial analysis in support of Europe's Green Deal. Experienced in Python, Excel, and policy-relevant sustainability modeling.

---