Copying regulations on greenwashing for retail financial services without regard to the specificities of pension funds will “lead to poor and inadequate regulation”, PensionsEurope has argued.

In response to the European Insurance and Occupational Pensions Authority’s (EIOPA) consultation on Sustainability Claims and Greenwashing, the association said it supports the efforts the European institutions to eliminate greenwashing, whilst highlighting some concerns.

“ESG risks, and climate change risks, in particular, play an increasingly significant role in risk-management. We would like to emphasise that pension funds are active as buyers on the financial market, providing pension schemes. They do not provide personal financial products.

“Typically, clients of pension funds are sponsoring companies which – especially considering the Corporate Sustainability Reporting Directive (CSRD) – are, contrary to retail customers, well able to conduct a satisfactory ESG due diligence of their suppliers. Simply copying regulations for retail financial services without regard to the specificities of pension funds will lead to poor and inadequate regulation,” PensionsEurope warned.

Furthermore, PensionsEurope noted that as not-for-profit organisations with often mandatory participation and without marketing or sales that operate on the demand side of the financial market, pension funds are not involved in ‘misselling’ ESG claims to obtain an unfair competitive advantage.

---