EU institutions have reached a deal on a reform of the IORPs (Institutions for Occupational Retirement Provision) Directive that affects workplace pension funds holding assets worth EUR 3.2 trillion on behalf of around 75 million citizens of the Union.

The changes include a clear requirement for EU workplace pension funds to:

  1. consider climate risk and risks related to the depreciation of assets due to regulatory change (“stranded assets”) in investment decisions
  2. be more transparent with workplace pension scheme members and more open with the public about their investment policies and holdings
  3. not limit investment decisions to financial considerations only, but include environmental, social, and governance (ESG) issues as well

The changes are another recognition of the danger the continued use of fossil fuels constitutes to both our climate and our collective finances. welcomes the move as a game-changer and appreciates the work of our civil society allies on this.

The deal has now been ratified by the European Parliament by a recent vote (here the text that went into the vote – the official approved version hasn’t been published yet)and will be transposed into national law in the member states over the next 24 months.

To all pension fund divestment campaigners out there: this one’s for you!