Dutch pension funds must speed up implementation of the Sustainable Finance Disclosure Regulation (SFDR), according to financial market regulator AFM. But for now, compliance will not yet be rigidly enforced, AFM director Laura van Geest said.
“The pension sector is less advanced in the implementation of the SFDR than the asset management sector since many pension funds have chosen to [temporarily] opt-out of SFDR, ”Van Geest said at the annual congress of the professional publication Pensioen Pro.
Most of the funds that have pulled out have done so because they believe there is still too much uncertainty about the implementation of the SFDR.
The AFM director called on pension funds to “take the lead”. She said: “Do not see sustainability as a complex challenge, but as a strategic tool to leverage the commitment and trust of your members”.
Van Geest added that the regulator has been patient with pension funds as many practical questions regarding the implementation of the regulations remain.
“While some regulators in other countries have already started to interpret the SFDR themselves, at the AFM we have decided to wait for clarity from Brussels first. As a result, we have spent nearly three quarters of a year answering your questions about SFDR. But at some point, the time to talk is over. Now it’s time to really get down to business, ”she said, speaking directly to pension fund executives at the convention.
“I don’t want to sound hostile, but we hope the pension industry now embraces the ideas behind the SFDR. I think you can take it up a notch, ”she added.
But pension funds don’t have to worry directly. “Until the regulation is completely crystallized yet, we will not apply it with an ax in hand,” said van Geest.
“Next year we’ll check to see if the funds have learned any lessons from our feedback. Only then will we resort to strict enforcement. “