The Italian pension fund for executives of commercial, haulage and transport companies, Fondo di Previdenza Mario Negri, is steering clear of a commitment to assessing the negative effects on the sustainability of its investments, saying European Union rules on the matter are still unclear and access to data is problematic.
The EU’s sustainable finance disclosure regulation (SFDR) has introduced requirements relating to reporting on investments’ “principal adverse impacts” on the natural environment and social matters. Investors have the option to say they do not consider these impacts, but have to explain why they do not.
Fondo Mario Negri said the EU regulatory framework on the transparency of sustainable investments is “not yet definitive” and that it therefore “deemed appropriate a prudent approach” to avoid incurring possible risks of sanctions, in addition to reputational and operational risks, it added.
The pension fund has also decided not to list its sub-funds as SFDR Articles 8 or 9.
It said that investee companies are not yet required to prepare corporate information on sustainability, consistent with the principles of the SFDR. The Corporate Sustainability Reporting Directive (CSRD), which reforms corporate sustainability reporting by aligning it with the SFDR and the EU Taxonomy, will come into force progressively between 2024 and 2026, depending on company size.
Before that date, the information gap can only be filled with data provided by market operators, which in practice can differ and carry with them a “significant increase in costs”, the fund stated.
Fondo Mario Negri continues to integrate ESG criteria in its investment process, and uses a platform run by software company Manaos, a subsidiary of BNP Paribas, which is also the scheme’s custodian, and Clarity AI, to assess the ESG profile of its mandates.
Meanwhile, the fund’s board of directors is considering further diversifying its alternative investments, mainly in private equity, private debt, and infrastructure, on top of real estate, the only alternative asset class in its portfolio so far, it said.
Assets amounting to €4.05bn are invested through four sub-funds investing in investment grade, high yield, and convertible bonds, equities, forex and real estate, according to the fund’s 2023 annual report.
The sub-fund ‘Conti Individuali’ returned 6.32% last year; the ‘Bilanciato Medio Termine’ returned 9.99%; the ‘Bilanciato Lungo Termine’ returned 9.98%; and the ‘Garantito TFR’ returned 1.54%.
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