How do sustainability requirements from your pension fund also impact your business?
The EU is focused on creating better funding opportunities for sustainable businesses. An important element is new requirements for financial institutions offering financial products—such as pension funds and asset managers. They are now required to inform customers about the sustainability impact of their products.
The information includes more general details such as:
- Policies for sustainability risks in investments
- Specific measures to mitigate risks (which can be through active ownership)
- How sustainability is integrated into the compensation of the financial institution
Additionally, for each of their financial products, financial institutions must disclose how sustainability affects returns and how it factors into investment decisions. The new rules also allow for the creation of special sustainable investment products that must meet a series of detailed reporting requirements regarding environmental and social conditions for the companies being invested in.
What does this mean for your business, and what can you do?
If you are or wish to be financed by pension funds and similar entities, you should expect that the pension fund will impose more precise requirements regarding the sustainability of your business model. They will likely also require ongoing reporting on selected sustainability metrics.
At Valified, you can easily create your own Valified ImpactReport, which can be used for this type of ongoing reporting to investors.
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