Dáil Éireann Debate, Thursday - 22 April 2021
96. Deputy Mairéad Farrell asked the Minister for Social Protection if her Department requires pension funds to disclose investments in fossil fuel and extractive companies; and if she will make a statement on the matter. [20924/21]
Amharc ar fhreagraThere are a number of environmental disclosure requirements which apply to Irish pension schemes.
Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (the "IORP II Directive") provides for the consideration of Environmental Social and Governance factors in:
- Investment (Article 19)
- General governance (Article 21)
- Risk management (Article 25)
- Own risk assessment (Article 28)
- Statement of Investment Policy Principles (Article 30)
- Information to be provided to prospective members (Article 41)
Additionally, the EU ‘Action Plan on Financing Sustainable Growth’ (including recent Regulations in relation to Sustainable Finance Disclosures, Sustainable Finance Benchmarks and Taxonomy), will develop over the coming years – and pension providers and schemes will have to address additional reporting requirements as a consequence.
Regulation (EU) 2019/2088 on Sustainability-Related Disclosures in the Financial Services Sector (SFDR) seeks to achieve greater transparency regarding how financial market participants (including IORPs) integrate environmental, social or governance (ESG) risks into their investment decisions and provides for specific disclosure requirements in this regard including:
- Policies on the integration of sustainability risks in the investment decision-making process (Article 3)
- A statement concerning adverse sustainability impacts (Article 4)
- Information on the integration of sustainability risks to be provided as part of pre-contractual disclosures (Article 6)
In line with Action 12 of the 2019 Climate Action Plan, the Department has considered how a requirement could be placed on pension schemes to disclose investment in fossil fuels. In light of the above-mentioned EU initiatives and Ireland’s commitment to our 2030 Climate and Energy goals, this action was considered in the context of facilitating meaningful environmental disclosure rather than a strict requirement on pension scheme trustees.
As noted above, significant developments are taking place in the area of sustainable finance across the EU and in the EU and Irish pensions market. Initiatives under the Government’s Roadmap for Pensions Reform, including those in respect of Master Trusts and an Automatic Enrolment Programme, will also reshape the Irish pension landscape over the coming years.
The adoption of additional disclosure requirements is being kept under review as key milestones in the wider regulatory framework are reached over the coming months and years.
I trust this clarifies matters for the Deputy.
