The Dutch Federation of Pension Funds has issued its response to the European supervisory authorities’ (ESAs) consultation on greenwashing, urging regulators to accept various sustainability approaches.

It stated that it was important for pension funds to communicate about sustainability factually and in a balanced way, but asked for a nuanced approach.

In is response, the federation called for the approach to greenwashing to focus on the correct implementation of Sustainable Finance Disclosure Regulation (SFDR) and on tackling parties that make unsubstantiated sustainability claims to obtain an unfair competitive advantage.

To the pensions sector, preventing greenwashing is primarily about complying with European sustainable finance legislation, the federation noted.

Therefore, it argued, commercial motives to make unsubstantiated claims were not applicable to the sector, with Dutch pension funds operating as non-profits with mandatory participation of employees and no marketing activities.

“An approach to greenwashing should focus on parties making unsubstantiated sustainability claims to gain a competitive advantage,” the federation said.

Later in its response to the consultation, the Pension Federation noted that sustainable finance legislation had only recently been introduced and is still being implemented, with outstanding problems with the availability of ESG data and ambiguities in legislation.

Therefore, it argued it would be appropriate for time to be allowed for the correct implementation of the legislation before the next steps are considered.

Finally, the federation urged the regulators and supervisors to accept various ESG approaches when assessing greenwashing.

“Assessing how green investment portfolios currently are and whether financial market players are doing what they say they are doing are part of that,” it continued.

“Realising ESG impact by taking into account engagement and contribution to the climate transition as a whole should be considered as an equally relevant approach.”

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