PensionsEurope has rejected as unfounded a think tank’s depiction of its lobbying on EU sustainable finance policy, in particular expressing concerns about a suggestion the association was misaligned with its members in its policy work.
Earlier this week InfluenceMap, a UK-based think tank, publicised research that it said showed “all but one of the 20 powerful industry associations analysed have lobbied to dilute and delay key regulations designed to align Europe’s financial system with the Paris Agreement”.
It also said finance industry associations “appear to have positions that are misaligned from most of their members and have tended to state high-level support for policies whilst lobbying on detailed regulation to weaken their stringency”.
PensionsEurope was one of the finance industry associations considered in the analysis.
In the think tank’s press release, it named PensionsEurope as one of other finance industry associations that “have intervened to weaken and delay proposed EU legislation”.
In its report InfluenceMap said it consulted extensively with the industry groups on the research methodology and their scores before releasing its report.
Rebecca Vaughnan, InfluenceMap analyst, told IPE: “We reached out to all the finance industry associations covered in the report by email in July to give them the opportunity to view their online profiles in advance and provide feedback.
“We had constructive discussions with many of the industry associations but unfortunately did not hear back from PensionsEurope in July, or when we tried to follow up again in August.”
She said InfluenceMap did not have contacts at PensionsEurope so e-mailed the organisation’s generic e-mail address.
Contacted by IPE, Matti Leppälä, PensionsEurope’s general secretary, said that in his opinion the think tank had not shown any basis to include PensionsEurope in the generalised statements about trade associations in the report.
The claim about misalignment with its members was an extremely serious accusation, he said.
Asked by IPE how the think tank ascertained the alleged misalignment between PensionsEurope’s lobbying and its members’ positions, Vaughnan said it did not currently capture individual pension funds’ positions and had not contacted national pension fund associations.
Instead, its view about misalignment is based on the think tank’s scores of the lobbying on EU sustainable finance policy of financial groups that it found to have links to PensionsEurope. The links were either in the form of the financial groups being a corporate member of PensionsEurope or being on the board of a national pension fund association member of PensionsEurope.
Leppälä said this was a “totally absurd” basis on which to make misalignment claims, for reasons including that corporate and supporter members had no role in PensionsEurope’s decision-making bodies.
“The full members represent the buy-side pension funds and most of the corporate and supporter members the sell-side, for example asset managers,” he said. “That is why our full members are in full control of our policy.”
In his feedback to IPE, Leppälä also addressed several of the examples InfluenceMap gave of PensionsEurope’s lobbying, for example it co-signing a letter calling for the Sustainable Finance Disclosure Regulation (SFDR) timeline to be changed given concerns the technical details would not be in place before the regulation came into force.
“These ‘technical details’ are binding EU legislation that is still missing and without which it is impossible for anyone to comply with the regulation and this leads to serious legal uncertainties and liability issues for service providers as well as problems for pension funds and consumers who want to purchase these products,” said Leppälä.
“EU legislation should be drafted in such a way that it is good quality and that there is enough time for implementation. We have met with the EC and made it clear that we are not advocating against the disclosure rules but only asking the EC to do what it can to alleviate the problems stemming from impossible timelines.”
“It is vital to understand and respect that the purpose of pension funds is not to serve EC policies”
Matti Leppälä, PensionsEurope’s general secretary
The SFDR comes into force on 10 March 2021 but the implementing rules are not likely to be completed before the end of January, and pre-contractual disclosures for those entities in scope will then need to go through an approval process at national supervisor level. There are also concerns about sequencing, with work on the review of legislation about corporate non-financial reporting only just in the making.
It is true that PensionsEurope has criticised aspects of proposed SFDR rules, but Leppälä said this was nothwithstanding it agreeing there is a need to increase transparency in the field of sustainability risks and sustainable investment opportunities.
“We have advocated consistently for reforms that work in practice and help pension funds to make responsible investments,” he said.
“It is vital to understand and respect that the purpose of pension funds is not to serve EC policies but fulfil their legal duties and especially the fiduciary duty to provide pensions for the members and beneficiaries.”
InfluenceMap adds qualifier
Following publication of this article Vaughnan contacted IPE to say the think tank stood by its assessment of PensionsEurope but had added a qualifier to its report in light of comments the association made on the issue of alignment with member positions. It has emailed PensionsEurope to inform them of this.
InfluenceMap’s research can be found here.