PensionsEurope supports the efforts of the European Commission and the ESAs to eliminate greenwashing. Greenwashing exists in the financial sector. The recent sustainable finance legislative framework helps decisively to reduce unsubstantiated ESG claims.

By nature, pension funds are long-term investors that have as their main objective the delivery of adequate pensions to their members and beneficiaries. We should make sure that the proposals are fit for the collective setting of pension funds, which in some countries are very different from individual retail investment products.

Regulation should allow for sufficient flexibility for pension funds’ boards to incorporate the relevant ESG and non-ESG considerations. However, the implementation of sustainable finance legislation should introduce a certain level of comparability. Given the recent implementation of legislation, supervisors should focus on correct and clear implementation, before considering expanding legislative and supervisory powers. Action on greenwashing should focus on parties seeking unfair competitive advantage. See more details in our position paper.

The transition to an economy which allows a safe climate for all is one of the most important tasks for our generation. A wide range of policy initiatives is needed to pave the way for this transition. Concerning sustainable corporate governance, pension funds can play their role in fostering the transition based on sustainable ESG criteria. However, PensionsEurope believes that there is a need for clarifications and amendments in the proposed CSDD directive as part of the ordinary legislative process to make it appropriate for institutional investors and financial services providers. Therefore, we would like to express our position in our paper concerning the following points:

• Scope -Article 2
• Value Chain -Article 3
• Prevention of adverse impacts- Article 7
• Directors’ duties and civil liability- Article 22
• Reporting -Article 11
• Plan for transition -Article 15
• Framework for monitoring compliance -Articles 17 to 21

Newsletter 2023/01 - Topic 1