PensionsEurope has called on co-legislators to further loosen the rules for pension funds under the proposed update to the Sustainable Finance Disclosure Regulation (SFDR 2.0).
The trade body published its latest position on the regime, which is ready to enter political negotiations after a Parliamentary meeting this week.
It said that, while it welcomed many of the amendments suggested as part of the overhaul, more needed to be done to accommodate Europe’s pension funds.
Specifically, PensionsEurope wants SFDR 2.0 to distinguish between the way Institutions for Occupational Retirement Provision (IORPs) communicate with their members and beneficiaries, and the way financial institutions market to prospective investors.
Each of the EU’s three legislative bodies plan to ensure that pension funds – along with all other investors – are barred from making sustainability-related claims if their portfolios do not qualify for one of the regime’s three categories: ESG Basics, Transition and Sustainable.
PensionsEurope argues that member states should be allowed to remove IORPs from the SFDR categorisation framework altogether, but – given the European Council, Parliament and Commission have all taken that option off the table in their final positions – a more flexible approach should be sought instead.
Parliament will push to add a line into the legislative text allowing IORPs to communicate to their members “in a manner that fits their characteristics”.
The trade body welcomed that plan, but insisted it should “be clarified to ensure that IORPs can provide meaningful information on how sustainability factors are considered in the management of pension schemes” even if they don’t qualify for one of the categories.
Pension funds should simply have to ensure that their sustainability disclosures are “fair, clear and non-misleading,” it said.
The document also proposed the addition of a passage clarifying that pension funds do not have to double-check SFDR-related statements made by their asset managers in relation to funds run on their behalf, saying “financial market participants should be able to rely on information from underlying categorised products and regulated portfolio managers”.
Parliament confirmed on Monday that it will bypass the usual plenary vote when it comes to its negotiating position for SFDR 2.0, and is therefore ready to enter into trialogues with the European Commission and Council immediately.
