Pensioenfederatie wants sustainability due diligence directive to include investors

The Pensioenfederatie, the association of Dutch pension funds, has sent a letter to MEPs urging them to support the inclusion of certain investor obligations in the Corporate Sustainability Due Diligence Directive (CSDDD).

The CSDDD is up for a vote on Tuesday in the Legal Affairs Committee of the European Parliament in Strasbourg.

The Pensioenfederatie has sent a letter to all committee members urging them to vote for an amendment to Article 8a of the directive, which would give institutional investors and asset managers a duty to engage with investee companies on human rights violations and environmental adverse impacts in their supplies, through shareholder engagement and voting.

In the letter, the Pensioenfederatie said it was important the proposed amendement brings the CSDDD in line with OECD guidelines for institutional investors.

It also noted pension funds rely on outsourcing partners such as asset managers and data providers for the execution of their investment strategy.

“All actors in the investment chain should be either required or strongly incentivized to join forces in addressing human rights violations and environmental adverse impacts,” it said.

The Pensioenfederatie added, however, that institutional investors should not be held accountable for violations in the same way as their investee companies, repeating a point made by EP rapporteur Lara Wolters.

She told Dutch daily Het Financieele Dagblad earlier this week she discerned three gradations of involvement with human rights violations and environmental adverse impacts: a company can be responsible for these entirely, could be contributing to them or could be associated with them.

The latter is “the weakest form of involvement” and is applicable to pension funds in their capacity as investors, she added.

According to the Pensioenfederatie, the proposed Article 8a “provides for the appropriate tools – shareholder engagement and voting – in a manner that is proportionate to the degree of influence” an investor has on a company.

Furthermore, a European approach to sustainability due diligence requirements “will avoid a patch-work of national rules” and would bring about a level playing field for all European investors, the Pensioenfederatie added.

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