Climate Finance Policy Engagement Analysis
Climate Lobbying Overview: PensionsEurope has communicated high-level support for many sustainable finance policies in Europe, but has cautioned against a prescriptive approach to regulatory intervention in this area, particularly regarding pension funds.
Top-line Messaging on Climate-Related Finance Policy: In a 2022 position paper, PensionsEurope supported the objectives of the new EU Sustainable Finance Strategy in advancing the EU Green Deal and Europe’s transition to becoming a carbon-neutral continent by 2050. However, in feedback to the European Supervisory Authorities (ESAs) in 2023, PensionsEurope argued that ""greenwashing"" regulation should focus on parties ""seeking unfair competitive advantage"" instead of expanding legislative and supervisory powers. In 2024, it supported reiterated this position in a consultation response to EIOPA in which it supported the narrowing of the definition of ‘sustainable investment’.
Position on Taxonomies: PensionsEurope stated opposition to an expansion of the EU Taxonomy to cover environmentally harmful activities in a 2020 response to the Commission, and in a 2021 press release on the EU’s Renewed Strategy on sustainable finance. In a 2022 Position Paper, PensionsEurope stated support for “broadening the scope of the taxonomy to include more sectors in the green taxonomy”, including sectors that play a role in the transition, those that do not have a significant impact on environmental sustainability, as well as those with significant harm. It also specifically opposed a binary “green” and “brown” taxonomy.
Position on Climate Standards and Labels, and ESG Ratings: In feedback to the Commission in 2020, PensionsEurope appeared to support a European level accreditation scheme for the EU Green Bond Standard but argued that the ""narrow nature"" of the taxonomy created a ""limitation"". In 2023 comments to the European Commission, it supported regulatory action on ESG ratings and advocated for regulation to be extended to ESG data.
Position on Regulated Corporate Climate Disclosure: In 2020, PensionsEurope advocated for an ambitious review of the Non-Financial Reporting Directive (NFRD) in feedback to the European Commission and in 2021 1443248feedback it welcomed the extension of scope in the newly relabelled Corporate Sustainability Reporting Directive (CSRD), and advocated for more ambitious disclosure requirements. In response to the European Financial Reporting Advisory Group (EFRAG) in 2022, PensionsEurope broadly supported the European Sustainability Reporting Standards (ESRS), suggesting that materiality assessments may not be omitted without an explicit explanation or statement. However, it suggested exempting pension funds, asset managers and other financial market participants from reporting under CSRD given that ""SFDR reporting requirements already provide stakeholders with sufficient information"". In feedback to the Commission’s proposal on the ESRS in 2023, PensionsEurope argued against the approach to materiality proposed due to concerns around subjectivity, which implies support for higher ambition. It did suggest that pension funds should not be required to disclose what investee companies have deemed to be non-material. PensionsEurope has further advocated for international ESG reporting, supporting the Climate Exposure Draft proposed by the International Sustainability Standards Board (ISSB) in 2022.
Position on Integrating Climate into Investor Duties: PensionsEurope appears to have been actively engaged on policy changes to incorporate ESG issues into fiduciary duty, with mostly negative positions. In comments to the ESAs on Sustainable Finance Disclosure Regulation (SFDR), PensionsEurope argued the proposed level of investor ESG disclosure was inappropriate for pension funds and would add a high burden of compliance. In comments to the review of the SFDR Delegated Regulation in 2023, it urged the European Supervisory Authorities (ESAs) to minimize changes until sufficient time to meet the existing standards has passed. However, in a position paper in June 2024, it supported the need for setor-specific Regulatory Techincal Standards (RTS) under SFDR. In feedback to the Commission on the Renewed Sustainable Finance Strategy in 2020, PensionsEurope again appeared to oppose further action on fiduciary duty, including on engaging with pension fund members' ESG preferences. In a 2022 position paper, it further cautioned against a requirement to survey all members regarding sustainability preferences and asked for flexibility for pension fund boards to decide whether to incorporate ESG considerations. However, in 2023 input to the European Insurance and Occupational Pensions Authority (EIOPA), it broadly supported the integration of sustainability preferences, although it cautioned against guidance on the approach. It also opposed additions to reporting for institutions for occupational retirement provision (IORPs) in 2022 comments to EIOPA including ESG data, arguing that it would increase burden and costs.