The Dutch Federation of Pension Funds has sent a letter to members of the European Parliament’s Committee on Legal Affairs to support an amendment that would give pension investors a role in the Corporate Sustainability Due Diligence Directive (CSDDD).

Under the CSDDD, companies are required to conduct sustainability due diligence to prevent human rights violations and environmental damage in their value changes.

The proposed amendment would require institutional investors and asset managers to engage with investee companies about human rights violations and negative environmental impacts in their practices.

The federation stated that it strongly supported in the inclusion of investors in the CSDDD via the amendment (Article 8a).

It believed that CSDDD should be closely aligned with the OECD guidelines, with the majority of the Dutch pension sector having already signed the IMVB Covenant to implement the OECD guidelines.

The federation added that the mandatory inclusion of the entire investment chain, which would be helped by the proposed CSDDD amendment, would support pension funds in fulfilling their voluntary commitment.

Furthermore, the federation argued that Article 8a would provide the appropriate instruments, such as shareholder engagement and voting policy, in a manner that was appropriate to the degree of influence.

“This is a major improvement on the European Commission's proposal and reflects the OECD guidelines for institutional investors mentioned above,” the federation concluded.

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