Responses to a consultation on European Union (EU) sustainability rules have exposed the divide in opinion between PensionsEurope and the Dutch Federation of Pension Funds (Pensioenfederatie).

It comes amid a breakdown in relations between the two associations, which last week saw the Dutch federation announce its decision to quit PensionsEurope due to the “management of the supporting office, the strategic future, and the financing of Pensions Europe”.

While much of the Dutch and European feedback to the European Financial Reporting Advisory Group’s (EFRAG) consultation on revised and simplified European Sustainability Reporting Standards’ (ESRS) exposure drafts is word-for-word identical, there are divergences in several responses.

One of the starkest comes on the disclosure of anticipated financial effects: PensionsEurope backed option 2, arguing the proposed method of option 1 “raises significant short-term concerns, including estimation uncertainty, increased litigation risk, and the lack of standardised methodologies and comparable data to ensure consistent disclosures”.

“Such forward-looking and sensitive information is particularly difficult to report at present and may give a false impression of certainty. plagued by estimation uncertainty, legal risk and the absence of standardised methodologies, and should therefore remain voluntary until more reliable data is available,” it stated.

In contrast, Pensioenfederatie insisted on option 1, but stressed the importance of climate risk metrics for investors and that they should stay mandatory, albeit with phased-in safeguards.

“We prefer option 1, but stress the importance of the applicable conditions and safeguards (on the use of the relief) to be further specified. We believe that the availability of climate risk metrics is important. For that reason, the effects of both options should be assessed as prepares often raise undue costs and burden as a reason for not providing this information. It would be valuable to assess the conditions under which it can be invoked by a preparer and whether it could negatively impact on the wide availability of climate risk metrics,” it stated.

Furthermore, PensionsEurope appeared to be more cautious in its response than Pensioenfederatie. For example, on net versus gross reporting, PensionsEurope called for one uniform approach but did not specify between the two, while the Dutch federation came down firmly in favour of net reporting.

However, the two were mostly aligned on the other questions of the consultation. On proposed amendments to simplify the Double Materiality Assessment (DMA) process, reinforce the information materiality filter and strike an acceptable balance between simplification and robustness of the DMA, both associations submitted the same response verbatim, suggesting collaboration.

While they appreciate the clarifications on impacts, risks and opportunities (IROs), both said that the simplified DMA approach, especially for complex value chains, may narrow the scope of disclosures. On the top-down method, both said that while it can be “pragmatic”, companies should clearly document their process and address potential blind spots.

“A quick scan of initially non-material topics may help mitigate these blind spots. Reporting at the IRO level may reduce comparability across companies. Clear guidance and examples illustrating differences between topical and IRO-level disclosures would support preparers in making informed choices. We also encourage undertakings to disclose what triggered changes in materiality assessments over time,” the associations both wrote.

The two organisations also advocated for “strong alignment” between due diligence and value chain reporting. They believe that companies should explain chosen value chain boundaries, coverage per material topic, and data quality for key metrics.
In addition, both agreed that removing disclosures on policies, actions and targets (PATs) would weaken transparency and must always be explained, especially for material risks and impacts. They also shared concerns that reformulating mandatory datapoints into application requirements could reduce clarity and enforceability, and stressed the need for consistent guidance.

At the same time, both welcomed the restructuring of the ESRS architecture to cut duplication, improve readability through appendices, and ensure reports remain concise while still comprehensive for investors.

Both associations also backed the adjusted gender pay gap as a more meaningful and decision-useful metric for investors than the unadjusted version, which was only introduced for SFDR alignment despite its known limitations.

They argued that now is the right moment for ESRS and SFDR to converge on the adjusted measure, which is already widely used, involves limited extra burden for companies, and provides a far clearer picture of wage equity and comparability.

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