Pensioenfederatie urges inclusion of investors in sustainability due diligence directive
Dutch pension funds are calling on Members of the European Parliament (MEPs) to support specific investor obligations in the Corporate Sustainability Due Diligence Directive (CSDDD). The Pensioenfederatie, the association of Dutch pension funds, sent a letter to all committee members ahead of the vote on the CSDDD in the Legal Affairs Committee of the European Parliament.
Dutch pension funds are calling on Members of the European Parliament (MEPs) to support specific investor obligations in the Corporate Sustainability Due Diligence Directive (CSDDD). The Pensioenfederatie, the association of Dutch pension funds, sent a letter to all committee members ahead of the vote on the CSDDD in the Legal Affairs Committee of the European Parliament.
The letter specifically urges MEPs to vote in favor of an amendment to Article 8a of the directive. This amendment would impose a duty on institutional investors and asset managers to engage with investee companies on issues related to human rights violations and environmental impacts. The engagement would take place through shareholder involvement and voting.
The Pensioenfederatie argues that aligning the CSDDD with the OECD guidelines for institutional investors is crucial. Additionally, the association emphasizes the dependence of pension funds on outsourcing partners, such as asset managers and data providers, for their investment strategies. The letter states that all participants in the investment chain should be obligated or incentivized to address human rights violations and environmental impacts.
However, the Pensioenfederatie clarifies that institutional investors should not be held accountable for violations in the same manner as investee companies. The association echoes the sentiments of EP rapporteur Lara Wolters, who explained that there are different levels of involvement in human rights violations and environmental impacts.
Pension funds fall under the category of the weakest form of involvement as investors. The proposed Article 8a is seen as a proportionate tool that provides institutional investors with appropriate means of engagement and voting based on their level of influence over a company. Moreover, the Pensioenfederatie argues that adopting a European approach to sustainability due diligence requirements would prevent a patchwork of national rules and create a level playing field for all European investors.
