PensionsEurope welcomes the ECB review of its monetary policy strategy which has undergone a process of gradual transformation since it was adopted in 1998. Today the euro area is facing various new economic challenges, such as the COVID-19 crisis, and there will be many new challenges to overcome in the upcoming years which need to be jointly tackled by monetary, economic, and fiscal policies.
As despite negative interest rates and QE programmes the ECB has not achieved its inflation target over the last years, possibly the ECB could be more flexibility around its inflation target and consider targeting price growth in a band, in full respect of the ECB’s price stability mandate as enshrined in the Treaty.
In general, we believe that unconventional monetary policies have had effect in many areas, including various positive and negative side effects. This applies for the economy at large, as well as for pension funds more specifically in the form of preventing a (severe) recession, realising relatively good returns but also substantially more expensive liabilities. You can read our input to the ECB review of its monetary policy strategy here.
On June 30, PensionsEurope submitted its feedback to the High-Level Forum CMU report. You can find our feedback here.
PensionsEurope submitted its comments to the EIOPA consultation on the PEPP ITS supervisory reporting and cooperation. You can find our comments here.
Together with various firms and institutional asset managers, PensionsEurope, Pensioenfederatie, iapf and Insurance and Pension Denmark submitted a joint response to the ESMA consultation on central clearing solution for pension schemes arrangements. The response highlights that if pension funds are required to clear their derivatives and to post cash as variation margin, we need to ensure that liquidity will be granted in the repo markets in times of market distress and set up collateral transformation arrangements with central banks. Central banks would provide a facility that would allow pension funds to transform high quality collateral to cash, at a haircut and cost. A high credit-quality, regulated entity would intermediate between pension funds and central banks. This entity could be an existing CCP, or any other regulated entity set up purely for this purpose
PensionsEurope responded to the European Commission’s consultation on the review of the Non-Financial Reporting Directive (NFRD).
The goal of the NFRD review consists of ensuring that companies disclose adequate ESG (Environmental, Social, and Governance) information on their activities. In particular, the review would ensure that pension funds as well as all investors have access to adequate non-financial information from investee companies to be able to take account of sustainability-related risks, opportunities and impacts in their investment decisions, such as required by the new regulatory framework on sustainable finance.
The whole framework on sustainable finance needs to adopt a holistic approach. There are significant gaps between companies' current reporting and the information financial institutions need to be able to comply with the obligations imposed by the Sustainable Finance Disclosures Regulation (SFDR) as well as the Taxonomy Regulation.
- The mandatory indicators to be used under adverse impact due diligence under SFDR should be reported by companies and stored in a central European database.
- Geographical reach: The Taxonomy and SFDR apply to the entire portfolio, NFRD only to EU companies. How will pension funds as well as all investors achieve the necessary ESG data on their non-EU investments?
- Timing gap: The new disclosure requirements for investors will be implemented in March 2021 while the legislative process on the reporting requirements for companies has just started.
A common standard for non-financial corporate reporting would be very helpful to satisfy the needs and obligations of the financial sector and enable the allocation of private capital to sustainable companies. Any common European ESG reporting standard should incorporate the principles and content of existing standards and frameworks.
It is necessary to differentiate different types of companies and to discuss the approach EU legislation should take:
- Companies which are capital-market-oriented should be required to provide a set of core data points and additional information specific to their sector, reflecting the respective company’s material ESG topics.
- The inclusion of large private companies could be useful, as ESG data can be particularly problematic to get in private equity investments. It is also problematic that most private equity funds are domiciled outside the EU.
- Non-listed small companies should be subject to non-binding guidelines to avoid onerous administrative burden.
PensionsEurope welcomes the publication of the Final Report of the High-Level Forum on CMU “A new Vision for Europe’s capital markets”, as it sheds light on the importance of having effective capital markets and sustainable and adequate pensions. Pension funds need fully functioning and integrated capital markets to provide good pensions to their members and beneficiaries and this report includes many recommendations that could lead to steps towards an objective we strongly support: the realisation of the CMU. You can find our press release here
The recent regulatory developments in the context of the EU Sustainable Finance agenda create an urgent need for publicly available ESG data as well as how to enhance their sourcing. Compliance with the new disclosure obligations introduced by the sustainability disclosures Regulation requires financial market participants to have access to comparable robust and reliable ESG data at the level of companies. Unfortunately, the availability of quality, comparable, reliable and public ESG data is currently rather limited and insufficient to comply with the increasing expectations and new regulatory requirements due to apply shortly. For this reason, the 6 associations jointly call the EU to build and / or support, based on existing solutions, a centralised electronic open source EU ESG data register with the following characteristics:
- The data register should focus on ESG disclosure in line with NFRD, EU taxonomy based information, starting with climate change adaptation and mitigation objectives, as well as ESG data necessary to financial market participants to comply with the SFDR.
- The register should also include relevant ESG information already collected by European and national institutions such as governments, central banks, statistical bodies, etc.
- Such data should be gathered and made available digitally to users of non-financial information, not only investors, but also lenders, academia, researchers, authorities and others.
You can read the joint letter here.
PensionsEurope today published a statement on the Covid-19 Crisis 2020. You can read it here.
A group of financial associations — including PensionsEurope — has written to the European Commission president Ursula Von der Leyen to call for the new Commission to ensure that the global competitiveness of European financial services is a key objective in its policymaking.
The associations fully support the Commission’s objectives of preserving and improving financial stability, protecting savers and investors, and ensuring flows of capital to where it is needed. Indeed, the need to maintain a robust regulatory framework for the financial sector and the Commission’s ambition to promote Europe’s competitiveness on the global stage are two sides of the same coin.
The associations also called on the Commission to:
- Ensuring an international level playing field and focus on eliminating the potential for any regulatory arbitrage between Europe and other jurisdictions that could create competitive disadvantages for European companies.
- Continue working with the European Parliament and the Council of the EU to ensure compliance with the existing inter-institutional agreement on better law-making. When carrying out impact assessments, impact analysis should also be done with global competitiveness in mind.
- Rigorously implement the “one in — one out” approach to regulation proposed by the new Commission. The compliance burden and risks for the EU financial services industry increased considerably during the last Commission’s mandate, mainly due to EU texts being developed in silos and without recognising that multiple EU texts might apply at the same time at the point of sale, creating overload and duplication, which in turn impacts global competitiveness considerably.
- Acknowledge that a globally competitive and vibrant European financial services industry is vital for making the Capital Markets Union a reality.
The PensionsEurope Secretariat is currently looking for a Director/Associate Director, Marketing.
PensionsEurope, the voice for workplace pensions and other funded pensions in Europe, is looking for a Director/Associate Director to join its Brussels secretariat. We represent 24 national associations of pension funds in EU Member States and other European countries. PensionsEurope, through its members, covers pensions of over 110 million Europeans and represents more than € 4 trillion in assets. PensionsEurope also has 26 Corporate and Supporter Members which are various service providers and stakeholders that work with pension funds.
This position is new in PensionsEurope and the purpose is to increase membership and develop revenue income as well as improve visibility and reputation of PensionsEurope.
The Director/Associate Director is responsible for membership recruitment, retention and relations management, sponsor acquisition and sponsor relations for e.g. our Annual Conference and other events as well as other commercial activities to generate income. The Director/Associate Director is expected to represent PensionsEurope in various events and manage the marketing and communication activities of PensionsEurope.
A successful candidate will have substantial experience in developing membership marketing, communications and plans that meet business objectives. He/she can demonstrate experience in operating at a senior level in a complex organisation and building and maintaining effective relationships and engagement. The candidate should have demonstrable commercial sales and business development experience, preferably in a membership, not-for-profit or third sector organisation. As the Director/Associate Director will need to represent PensionsEurope in various events knowledge of current pension and financial services issues would be desirable.
The Director/Associate Director will report directly to the Secretary General/CEO.
This new position in PensionsEurope will be filled for a fixed term to be agreed.
The deadline for applications is Friday 27 March 2020.
Please send your CV and cover letter in English to the attention of Mr. Matti Leppälä, Secretary General/CEO at: email@example.com or by regular mail to PensionsEurope, Montoyerstraat 23 rue Montoyer, 1000 Brussels, Belgium. For further information please contact the Secretariat at +32 2 289 14 14.