ShareAction have coordinated a letter co-signed with 11 other organisations, to the European Council on the IORPs (Institutions for Occupational Retirement Provision) Directive.
The Trialogue negotiations between the Council, Commission and Parliament are due to begin on 29th February , which is why we are sending this to the Financial Attachés at each Member State’s Permanent Representation now.
The EU Trialogue is an informal tripartite meetings attended by representatives of the European Parliament, the Council and the Commission. Owing to the ad-hoc nature of such contacts, no “standard” format of representation has been laid down, The level and range of attendance, the content and the purpose of trilogues may vary from very technical discussions (involving staff level of the three administrations) to very political discussions (involving Ministers and Commissioners). They may address issues of planning and timetable or go into detail on any particular substantial issue.
In the ShareAction co-ordinated letter they ask for: “support for amendments recently passed by the European Parliament concerning transparency and consideration of environmental, social and governance factors in the investment process of pension funds.”
They go on: “The good governance and risk management of IORPs is thus extremely important for the health of the EU economy and for the financial security in retirement of millions of citizens, particularly the increasing numbers with unguaranteed, ‘defined contribution’ pensions who bear investment risks themselves. As pension funds are a significant investor group in the global economy, they have the potential and duty to influence positively the behaviour of their investee companies on issues ranging from poor corporate governance, to human rights abuses in supply chains and emissions reductions.
“A failure to properly consider ESG factors can put pension savers’ money at risk. For example shareholders in Volkswagen have lost billions in the wake of the emissions and governance scandal which lead to a 32.36% drop in the automobile manufacturer’s share price.”