PensionsEurope has set out its targeted proposals for the final negotiations on the Sustainable Finance Disclosure Regulation (SFDR) 2.0 framework, aiming to ensure it is proportionate and workable for occupational pension funds.

It reiterated that EU member states should have the option to exclude IORPs from mandatory application of the new categorisation framework, while recognising the improvements made in the Council and European Parliament's positions since the initial negotiations.

In its initial position paper on the revised SFDR proposal, PensionsEurope warned that the framework still insufficiently reflected the specific characteristics of IORPs and called for a “coherent and predictable implementation timeline” so that the uncertainty and costs experienced under SFDR 1.0 were not repeated.

Building on this, the association’s follow-up position paper focused on the remaining issues it felt needed to be addressed in the final negotiations, including communications with members and beneficiaries.

The follow-up paper also called for the reliance on information from underlying investments to be addressed, alongside recommendations on the treatment of sovereign debt, proportionality of principal adverse impacts (PAI) and reporting requirements, and sufficient implementation time.

It welcomed the Council and European Parliament’s ‘improvements’ relating to occupational pension funds, including on sovereign debt, Article 9a, and the recognition of the specific communication needs of IORPs.

However, it warned that member states should have the option to exclude IORPs from mandatory application of the SFDR categorisation framework, noting that neither the Council nor Parliament had provided this as an option.

“If IORPs remain within the framework, the final regulation should adequately reflect the specific characteristics of occupational pension provision,” Pensions Europe stated.

In its follow-up position paper, the association set out several proposed amendments relating to the treatment of IORPs in the framework, as well as to Article 9a, ESG and PAI disclosures, and the implementation timeline.

---